FirstRock Private Equity Limited, FRPE, has taken a majority stake in Optimum Trading Limited, a distributor of dental and medical supplies in Jamaica.
The terms of the takeover were not disclosed.
But the private equity firm is already indicating that it first plans to expand the company’s product portfolio then list the dental supplier on the stock market by next year.
Optimum Trading, which is said to cater to about 400 of the 500 registered dentists and practitioners, was formed in 1991 by Sheldon Powe, who was a first-year student at the University of the West Indies at that time. Powe says he came up with the idea when he realised that his dentist stepfather, the late D.K. Duncan, badly needed dental supplies that were not readily available in Jamaica.
“My mother used to run my stepfather’s office and when I saw the amount being spent on dental supplies, I called my mother’s brother, who was a dentist in New York, to put me on to his suppliers. I started from there, bringing in supplies for my stepfather and his colleagues,” Powe said.
Optimum Trading caters to a small, close-knit dental community. Powe says the company maintains contact with the various professionals in the field from as early as when they enter one of the three dental schools in Jamaica or study through scholarships in Cuba or Brazil.
“It has been steady growth with good customer service. We maintain a relationship with the dentists from before they graduate, so that by the time they start to practice, they’re familiar with the products that we stock,” he said.
The Jamaica Dental Council says its roll of registered professionals include 84 dental hygienists, 41 dental nurses, 10 dental technicians and 395 dentists.
FirstRock has acquired 51 per cent of Optimum for an undisclosed sum.
“We’re not at liberty to say the acquisition cost at this time since the new board has not yet met,” said FRPE Managing Director Christopher Yeung.
“What I can say is that at FirstRock we have an acquisition range of between US$1 million and US$5 million,” he said.
Asked about the move to invest in a business that is so different from other FRPE investments, Yeung said Optimum is a resilient business that will add diversity to the FirstRock Private Equity group.
“Our usual space is to partner with SMEs that we believe in. That was the case with Dolla, then My Ocean in tourism, and now we are looking at our third SME in Optimum, which is in healthcare. We will continue to grow and diversify the portfolio,” he added.
FRPE, which was formed in 2021, holds a 60 per cent stake in microlender Dolla Financial Services Limited, which is listed on the junior market of the Jamaica Stock Exchange and was formerly held under FirstRock Capital, now known as FirstRock Real Estate Investments. FRPE’s second holding was acquired in February 2022, a 26 per cent stake in Bahamian handmade soap and candle company, My Ocean.
As for its newest investment, Yeung said FRPE intends to expand the business’ footprint beyond Jamaica, while growing its 4,000 SKUs, or stock-keeping units – a catalogue of mostly dental supplies – by adding more medical supplies.
“The plan is to revamp the business by making it more efficient in supplying the market, leveraging the balance sheet to expand, and then, ultimately, to list on the JSE once we hit certain metrics,” Yeung said.
FRPE has set a schedule of 12-14 months to take Optimum Trading public.
Optimum’s full board, which is yet to meet, includes founder Sheldon Powe, CEO Jason Clarke, Ian Kelly of Derrimon Trading, Dr Michael Banbury, and Yeung. The latter three men are also members of FRPE’s board.
Clarke says the partnership with FRPE will provide access to capital for expansion beyond what the previous three-person board could must. That board comprised brothers Dylan and Sheldon Powe, along with Clarke, who was hired as CEO 11 years ago.
“Coming from a family-based business to being a company that is more inclined for corporate governance, we need more minds thinking about the same things; but also more minds with different expertise,” Clarke said, noting that the addition of Banbury, Kelly and Yeung brings links to distribution, medicine and finance that will be necessary for growth and expansion.
The timeline for Caribbean expansion was not disclosed, but Clarke said they company was more inclined to look for additional markets regionally, rather than compete on price in the local space against rivals such as Cornwall Agencies, a subsidiary of Medical Disposables & Supplies Limited.
Optimum currently represents NovaCal Pharmaceuticals for anaesthetics Dentsply Sirona for dental supplies, and 3M for medical supplies.
“We represent a number of the largest manufacturers and brand names in the industry and based on our relationship, they’ve been encouraging us to expand to the Caribbean, since it’s better to work through companies like us rather than directly themselves,” Sheldon Powe said.