Mutual Victoria Investments Limited, VMIL, has entered into an agreement with Republic Bank (Barbados) Limited to acquire 100% of the shares of Republic Funds (Barbados) Inc.
Republic Funds owns and operates Republic Bank Barbados, which comprises the companies Republic Property Fund, Republic Income Fund and Republic Capital Growth Fund.
VMIL expects the transaction to close by August 2022 after approval from regulators in Barbados and Jamaica.
This is the second acquisition in Barbados for the mid-sized Jamaican investment firm primarily engaged in asset management, cash management, bonds and other market operations. The first was Carilend, a fintech company specializing in online lending, in which VMIL acquired a 30% stake in 2019.
The cost of acquiring Republic Funds has not been disclosed.
The fund, incorporated in 1998, began as a subsidiary of Barbados National Bank, but in 2012 was renamed Republic Funds (Barbados) following its acquisition by Republic Bank Barbados, a subsidiary of Republic Financial Holdings, based in Trinidad and -Tobago.
The business was put up for sale following Republic Bank Barbados’ decision to focus on its core commercial banking business. VMIL has been selected as the preferred bidder.
“A few AGMs ago we signaled to the market that we really wanted to grow in the region, so this has always been part of our strategic plan,” VMIL CEO Rezworth Burchenson told the Financial Gleaner Wednesday.
VMIL, which raised $ 2.3 billion earlier this year to fund its expansion, outlined plans in its 2020 annual report on growing active members and customers, leveraging digital technologies and deeper engagement. Jamaicans abroad as short-term strategic goals to improve profits and revenues. .
These plans are part of a transformation and growth program currently being implemented by its parent company, VM Group.
Republic Funds activity is strongly concentrated around asset management, a segment in which VMIL wishes to deepen its presence.
“We have that skill, and we want to leverage that skill with this acquisition and future acquisitions,” Burchenson said.
For now, Republic Bank Barbados still controls Republic funds. Once the deal is done, VMIL is looking to rebrand the company as VM and will also assess the market for new product introductions.
VM Group’s strategic unit, led by Chief Investment Officer Devon Barrett, is responsible for identifying potential M&A targets for VMIL, which is currently considering another acquisition in the southern Caribbean region.
Acquiring Republic Funds would benefit VMIL’s business, meaning it is expected to increase profits, but the company was unwilling to say much about the value.
“We can’t talk about the numbers yet,” Burchenson said.
VMIL reported net income of $ 348 million for the September quarter, up 82% from 2020, amid continued recovery from the pandemic. For the nine months ending in September, the company made a profit of $ 612 million on revenues of $ 1.7 billion. Its total assets exceed $ 30 billion.