Govt approves BFS sale to Sysco
The government has approved the sale of Bahamas Food Services (BFS) to one of the largest corporations in the United States.
Sysco, with revenue over $39 billion in 2011, will acquire the country’s largest food distributor for an unknown sum.
Khaalis Rolle, the minister of state for investments, said that a number of “protective measures” are in place to ensure Bahamians benefit from the transaction.
A key aspect of the deal is a 15 percent initial public offering (IPO) on the Bahamas International Securities Exchange (BISX). Rolle told Guardian Business that the IPO represents a “claw back” on an entity that used to be 100 percent foreign owned.
“It will now have a local ownership component,” he said.
The IPO should come as welcomed news to Bahamian investors and serve as a welcomed edition to the country’s stock market. The offering is expected to come online within 36 months, Rolle explained, as specified in the agreement.
The government has also requested an ongoing and considerable investment in agriculture and fisheries.
In other words, Sysco will be required to subsidize and modernize existing growers in The Bahamas, assisting them in getting products to market of a high quality and at a reasonable price.
“Sysco has major reach in the food service business and past experience in agriculture and fisheries. So we will ensure that is part of the approval,” Rolle explained.
BFS is currently owned by the Frisch family out of Jacksonville, Florida. The family controls Beaver Street Fisheries Inc. Guardian Business has learned that the Frisch family will stay on in the management of BFS for three years. This period is intended to give Sysco executives a “lay of the land” and guide them through the customs and norms in The Bahamas.
It is also another protective measure to protect local business.
Indeed, in the lead up to this approval, business leaders have expressed strong concerns over the acquisition.
Robert Pritchard, vice president of Asa H. Pritchard Limited, said a takeover would “hurt a lot of people”. In particular, he said it would destroy any small businesses trying to get into the food service sector.
The rival wholesaler said he didn’t like the deal, but noted that “I can’t see it not happening”.
Rupert Roberts, the owner of Super Value, went so far as to suggest the takeover would “destroy what we have”.
“It would change the methods of doing business,” Roberts said, who owns the largest supermarket chain in the country.
Rolle told Guardian Business yesterday that the government has spent a “considerable amount of time, a painstaking process of consulting local wholesalers” on the issue.
BFS has been operating in The Bahamas since 1971 and employs more than 300 Bahamians.