Gassan Azan acquires supermarket chain
Alfabet Holdings, an investment group led by Gassan Azan, has acquired the Van den Tweel supermarket group, which operates in the ABC islands of Aruba, Bonaire and CuraÁao in The Netherlands Antilles.
The chain comprises five stores known as Van den Tweel Supermarket, Ling & Sons, and Warehouse Supermarket. One is based in Aruba and two each in Bonaire and CuraÁao.
"From a cultural perspective, the supermarkets are quintessentially Dutch, and the strategy going forward is to maintain the culture and brand identity," said Azan.
The Jamaican businessman, who founded the MegaMart Wholesale Club, said the new business would continue to operate under their current brand names and with the same product range, which include fresh fruits and vegetables, meat from its own butcher shop as well as baked products.
Sygnus Capital was the lead adviser for the negotiations and the lead arranger for the financing of the supermarket acquisition. The head of Sygnus Capital, Berisford Grey, has a history with Azan as the arranger of financing for MegaMart's store in Mandeville when he worked at Scotia Investments Jamaica.
The share transfer transaction, which involved a 100 per cent acquisition, was completed on May 1, after more than three years of negotiation, Azan told the Financial Gleaner in an interview on Tuesday.
Preliminary discussions with the Van den Tweel Group began over three years ago. However, Azan hired Sygnus Capital as lead adviser a year ago to negotiate the detailed terms of the transaction, which includes valuation, managing all third parties and the lengthy due-diligence process. Sygnus, a start-up investment firm that formally launched its operations in mid-2017, was also responsible for ultimately closing the transaction.
Azan said the acquisition was a cash deal, but he declined to disclose the value of the investment, nor did he identify his partners in the deal, although he said they were also Jamaicans.
As to whether any of the new assets will be rebranded to MegaMart, Azan said the businesses already wear brands with strong appeal in their respective markets.
"Each supermarket has its own identity and each island has its own identity," he said. "On Aruba, for example, we have Ling & Sons, which is a very well established brand and very well established American-type supermarket," he said.
"Aruba has much more of an American feel to it, and the two on CuraÁao are very Dutch, and so are the ones in Bonaire, and that is the strength of them - that they cater to those communities in those islands," he added.
The businesses together employ 523 full-time and around 200 part-time workers, with no immediate changes planned for the workforce.
Azan has long been looking overseas for investment opportunity. Explaining the rationale for his choice of the ABC islands, Azan said it was based on opportunity.
"Coupled with that is the fact that these islands are extremely investor-friendly and they are very much on their way in developing their economy," he said.
The ABC islands are among the most stable Caribbean islands, have the highest GDP per capita and investment grade rating which provides a solid foundation for retail business, said Azan, noting that the acquisition was a deliberate strategy to diversify his business interests across Caribbean markets.
He said Warehouse Supermarket currently has a suite of Jamaican products, which they hope to strengthen.
Alfabet Holdings is a St Lucia registered company established specifically for the supermarket deal.
Founder and CEO of the supermarket chain, Gerard van den Tweel, has been retained as a consultant "mainly because of his entrepreneurial expertise and familiarity with the islands and the fact that we value his input on several issues", Azan said. He will continue on as adviser to the supermarkets for five years, initially, under contract that is subject to extension.
In addition to MegaMart, Azan also operates a chain of Bashco retail stores across Jamaica offering products such as electronics and appliances as well as furniture and house wares.