Spice and condiments manufacturer Spur Tree Spices Jamaica Limited (Spur Tree) has acquired majority ownership of agro-processing company Canco Jamaica, which trades under the brand Linstead Market.
The acquisition is intended to cement Spur Tree’s foothold in canned ackee exports, deepen export penetration and increase the production capacity of both entities.
CEO of Spur Tree, Albert Bailey, said the brand equity of Linstead Market made the acquisition “very attractive.”
“Jamaican products are gaining traction on the international market, and Linstead Market is an iconic Jamaican brand which has tremendous potential to go beyond where it is right now,” Bailey told Loop News.
Sales of both Spur Tree and Linstead Market is generated primarily from exports.
“We are excited about the potential from this investment. Canco has not, in any way, fully net its potential with such a great brand,” he said.
Spur Tree now owns a 51 per cent stake of Canco through a Share Subscription Agreement and a Share Purchase Agreement with shareholders of Canco, Spur Tree reported on Tuesday via a notice on the Jamaica Stock Exchange (JSE).
With Canco’s accomplishment as one of 10 local companies approved to process and export ackee to the US, Bailey sees the investment as “strategic to our growth and expansion moving forward.”
Spur Tree Spices CEO Albert Bailey
The 16-year-old company closed its acquisition of another St Thomas- based agro-processor, Exotic Products Limited, last year, a union which began in 2015.
That company is also approved to process and export ackee to the US and other key North American markets.
“So, this is cementing our placement in that particular growth sector, and we see that as significant for us because ackee is a highly demanded item. This [acquisition] is a continuation of that investment [thrust].
In addition, “Canco has the second largest ethnic distributor in the US distributing their products, so we want to build out a very high portfolio of products under that brand,” the CEO said of plans to leverage the brand’s US traction and appeal.
There are also plans to tap new markets following the expansion of the current product range within existing markets, he said.
“The Linstead Market brand is known for high-quality products, is well respected in the market and has a lot of upside to it. That’s what we see in this,” he said noting the plans to deepen market penetration.
While he was mum on the acquisition cost, Bailey said the intention is to pump capital into improving the capacity of the acquired brand.
“Majority of the acquisition cost will be reinvested into the business for further business development, expansion of capacity and to provide working capital,” he said.
There are also no plans to scale down operations at Canco’s operating plant.
“In fact, through this venture, we will have an expansion of employment opportunities at both plants,” he said.
For his part, founder of Canco, Norman McDonald sees the deal with Spur Tree as the “right fit,” having decided to seek a buyer for his business some time ago.
“We had several interested parties, but they gave us the best offer, not just monetarily but they gave us the opportunity to continue in the business, albeit with reduced ownership. We are very comfortable with Spur Tree,” McDonald said noting the shared vision of growth by both companies.
“We have the vision of expanding our reach more into the Caribbean and the rest of the world. We have big plans. We had them separately, and now we are together pursuing the same goal, so I think it is a very good marriage,” said McDonald.