Barita Investments Limited has announced that it has successfully financed a landmark transaction where a Jamaican company – Ecommerce Property Services Limited (Ecommerce) – acquired three (3) United States (US) based tech driven real estate services companies.
The larger of the three US-based companies is expected to have combined property sales exceeding US$2 billion (over J$300 billion) for the financial year 2021.
The three (3) US-based companies were previously primarily owned by Robert Slack and Dan Walters, who now (as part of the transaction) own a stake in Ecommerce (the Jamaican company).
The three (3) companies are vertically integrated tech-based companies that each serve distinct stages of the real estate purchase/sale process.
The companies are Robert Slack Fine Homes LLC (Robert Slack LLC) – Property Purchase/Sale Brokerage, Florida Funding LLC – Mortgage Brokering; and Florida Title LLC – Titling & Transaction Settlement Provider.
Robert Slack LLC is the largest of the three (3) US-based companies.
According to Real Trends Mega Teams rankings, in financial year 2020 Robert Slack LLC had the 3rd largest real estate brokerage mega team in the US by transaction volume (sides) and 2nd by transaction value. The company has experienced significant growth within the last six (6) years.
Since the financial year 2015, Slack LLC has reportedly grown from selling real estate valuing a total of US$46 million with just 43 agents on 256 transactions to US$1.5 Billion (approximately J$232.5 Billion) in sales from over 600 agents on 5,198 transactions during 2020.
As of October 2021, the entity’s team consists of 711 agents and 300 back-office support staff members across multiple countries (Venezuela, the Philippines and the US).
In 2021, it expects to sell US$2.2 billion (approximately J$341 billion) in homes in Florida alone.
The company currently only operates in Florida but has recently made tangible steps to expand across the US.
Florida Funding LLC is a mortgage brokerage firm that links home-buying clients with financial institutions that offer mortgages.
It currently offers financing solutions for home purchases, home refinancing or home equity through fixed and adjustable-rate loans, Federal Housing Administration (FHA) loans and Veteran Affairs (VA) loans.
Meantime, Florida Title LLC – is a full-service title and real estate transaction settlement provider in Florida.
It specializes in ensuring that the real estate transaction closing process is done in a smooth and orderly manner.
This service is provided when buying, selling or refinancing residential homes, investment properties, commercial buildings or vacant land.
The statement from Barita quoted its Vice President of Investment Banking, Terise Kettle, as expanding on the landmark transaction.
The Barita Vice President is quoted as saying – “across multiple fundraises, particularly our APOs, one of the key aims that we communicated to prospective investors is that we intended to further strengthen our balance sheet such that we are fully enabled to pursue a variety of financing strategies to create value and drive growth across multiple revenue lines”.
Ms. Kettle went on the further state that “a key objective pursuant to the aforementioned strategies, as mentioned in the prospectus of our last APO, under the Use of Proceeds section, is to add capacity to our principal investment portfolios to include, private equity, private credit, infrastructure and alternative investments.”
Ms. Kettle is quoted in the statement from Barita as saying – “this particular transaction highlights how we have done so by providing both quasi-equity and debt support to this private business. We successfully leveraged our balance sheet to help a Jamaican company buy three (3) US-based companies with significant growth potential”.
Barita wrote in its statement that Jamaica has traditionally been the home to acquisition targets (i.e. foreign firms buying local companies and repatriating profits).
According to Ms. Kettle – “in this transaction, Cornerstone (a locally owned company) through its subsidiary Barita Investments helped a Jamaican company (Ecommerce) to do the reverse. Now, profits from these US companies in the form of foreign currency dividend flows will be repatriated back to Jamaica for the foreseeable future.”
Barita noted that the transaction sees not just Jamaican financial capital being utilized to accelerate growth, but it showcases the ability of the Barita team to structure complex bespoke solutions in any market.
According to Barita, most importantly, the investment banking community will need to be fully attuned to executing transactions of this nature which have the potential to support/spur economic growth and development.
Barita says as a result of this transaction, all three companies are well resourced and positioned to continue and accelerate its expansion across the United States.
The financing and acquisition transaction was successfully executed by the Barita Investment Banking and Structured Finance Products teams with support from local and international service providers and professionals.
The supporting stakeholders reportedly carried out the due diligence (financial, commercial, information technology, tax and legal) and other professional services.