Some eight months after announcing its intention to buy Roadtown Wholesale — which with more than 470 employees claims to be the territory’s largest private-sector employer — the North West Company announced on Friday that the sale should be finalised by next month.
According to North West, it purchased the shares for about $32 million, plus $5 million in transaction costs such as stamp duty. North West stated that it will finance about 90 percent of the purchase through its existing credit facilities, and the remaining 10 percent through the issuance of North West common shares.
Net income jump
The purchase is expected to increase North West’s annual net income by about $5 million, the company added.
“We are very pleased to join with Riteway Food Markets and Roadtown Wholesale Trading Limited and to become part of the BVI,” said North West President and CEO Edward Kennedy. “Through this long process of working with RTW’s owners, government and other BVI stakeholders, we have gained an even greater appreciation of our opportunity to be a valued partner.”
RTW founder Peter Haycraft said in a statement that he made sure to sell his “life’s work” to a company that will continue to serve the territory effectively.
“North West is uniquely qualified in all these respects, and will bring enhancements to our business beyond what we could achieve on our own,” he said.
New MD
In an interview with the Beacon, North West Chief Development Officer Dan McConnell said that as soon as all the paperwork is finalised, the company’s staff will get the “ball rolling” to see where they can improve RTW’s operations to better serve the customer.
On the surface, though, RTW will largely remain the same: The company said it plans on keeping the RTW brand, and Mr. McConnell said that the staff will remain unchanged, with the exception that North West will bring a managing director to oversee the Virgin Islands branch.
The ongoing expansion at RTW’s Virgin Gorda store will also continue as planned, he said.
Sale delays
Asked why the sale took about eight months to complete, Mr. McConnell explained that North West had to demonstrate to government that it would be a “good corporate citizen,” ensuring the territory’s food security and retaining local partners.
The remaining 24 percent of RTW’s shares are held by local partners, he added.
“It was definitely favourable for us [to government] that that was something we were willing to do,” he said. “It’s good for us, too, to have shareholders actually shopping in the store so we can hear through many different avenues about what we’re doing. Overall, it’s a partnership that builds a stronger company.”
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