As suc­cess­ful fam­i­ly busi­ness­es age through gen­er­a­tions, en­ter­ing in­to an ini­tial pub­lic of­fer­ing (IPO) of shares rais­es the pro­file of com­pa­nies and sets a lev­el of in­de­pen­dence. 

Er­ic So­lis Mar­ket­ing Ltd (So­lis), a provider of mul­ti­func­tion print­ers, print so­lu­tions, and com­mer­cial dis­plays in T&T for over 50 years, launched its ini­tial pub­lic of­fer­ing IPO of 2,750,000 or­di­nary shares at $4 on Tues­day, po­ten­tial­ly rais­ing $11 mil­lion. This rep­re­sents 33 per cent of the to­tal is­sued or­di­nary shares in the com­pa­ny, valu­ing it at about $33 mil­lion. 

In a sit-down in­ter­view with Busi­ness Guardian on Mon­day, ex­ec­u­tive chair­man of So­lis, An­gel­la Per­sad, said many fam­i­ly com­pa­nies do not sur­vive more than three gen­er­a­tions, so do­ing an IPO and go­ing pub­lic brings a dif­fer­ent pro­file to the busi­ness and takes it to an­oth­er lev­el. 

“You can at­tract a dif­fer­ent lev­el of tal­ent, who would be more will­ing to join your com­pa­ny as many peo­ple don’t want to work in a fam­i­ly-owned com­pa­ny. That is be­cause they may say, well, I don’t  know what’s go­ing on there, my ca­reer path will al­ways be lim­it­ed. But in a pub­licly list­ed com­pa­ny, they could un­der­stand that there’s a dif­fer­ent lev­el of gov­er­nance, there’s a man­age­ment and a lead­er­ship team that will op­er­ate in a cer­tain way,” Per­sad ex­plained. 

She said the IPO fol­lows the com­pa­ny’s growth in prof­itabil­i­ty over the last five years. Al­so, she said the So­lis par­ent com­pa­ny, The Of­fice Au­thor­i­ty, which is owned by sev­er­al pri­vate share­hold­ers, ac­quired So­lis 17 years ago. 

“We want to be able to know that it has tak­en on a pro­file, al­most of in­de­pen­dence. You know that the com­pa­ny is like you have a child; you nur­ture the child for a cer­tain time, and then you step back and let it blos­som. We have full con­fi­dence in the lead­er­ship team that’s there now,” Per­sad dis­closed. 

She not­ed that the em­ploy­ees from both So­lis and Of­fice Au­thor­i­ty will now be able to buy shares in the IPO. 

The lead bro­ker, arranger, and un­der­writer for the of­fer, ap­point­ed by So­lis, is NCB Mer­chant Bank (T&T) Ltd (NCBMBTT). 

Dur­ing the in­ter­view, the bank’s CEO Mar­li Creese said So­lis is a long­stand­ing client of NCB and when the So­lis team told them the path it was con­sid­er­ing, the mer­chant bank was very sup­port­ive. 

“So much so that we told them that we would be very in­ter­est­ed, not just in be­ing a lead arranger and bro­ker for the trans­ac­tion, but al­so in ful­ly un­der­writ­ing the of­fer­ing. From a ba­sis of arrange­ment  stand­point, what we mean when we say that NCB Mer­chant Bank is the un­der­writer of the of­fer­ing is that if in a hy­po­thet­i­cal in­stance, let us say that there are ab­solute­ly no  ap­pli­ca­tions, we put our bal­ance sheet on the line to en­sure that the of­fer­ing is ful­ly sub­scribed,” Creese de­tailed. 

If the IPO is ful­ly sub­scribed, NCB Mer­chant Bank would be en­ti­tled to ac­quire up to 825,000 shares in So­lis, which is 30 per cent of the 2,750,000 shares be­ing of­fered in the IPO.

He said typ­i­cal­ly, what has been seen in the lo­cal cap­i­tal mar­ket is that when a com­pa­ny goes pub­lic, it may find a bro­ker, who agrees to take the com­pa­ny pub­lic, but of­ten on a best-ef­forts ba­sis. This means the IPO is on­ly par­tial­ly un­der­writ­ten. 

“In our case, we had the con­fi­dence to say we are pre­pared to ful­ly un­der­write this of­fer­ing,” Creese said.

Asked if now is a good time to do an IPO for an SME, Creese said, “It’s al­ways the right time for the right com­pa­ny.”

On the is­sue of what made NCB con­fi­dent that So­lis was ready to go the route of an IPO, the cap­i­tal mar­kets said to go for a list­ing, a com­pa­ny’s prof­its have to be over a cer­tain amount. 

“If we’re talk­ing about the T&T Stock Ex­change re­quire­ments for be­ing list­ed specif­i­cal­ly on the small and medi­um size (SME) mar­ket, it’s very trans­par­ent. The is­sued share cap­i­tal of the com­pa­ny has to be with­in a par­tic­u­lar range. They can­not be a sub­sidiary of a pub­licly trad­ed en­ti­ty that is domi­ciled out­side of Trinidad. There’s a cer­tain min­i­mum per­cent­age of the com­pa­ny that has to be list­ed. For T&T, that per­cent­age is 30 per cent,” he added.

In terms of head­count, Rishi Bad­daloo, group man­ag­ing di­rec­tor at The Of­fice Au­thor­i­ty, said at So­lis there are 30 per­ma­nent em­ploy­ees and 300 at the par­ent, who pro­vide mid and back-of­fice ser­vices to So­lis.  

“We are a ful­ly in­te­grat­ed group. So what that means is So­lis doesn’t have a di­rect hu­man re­source  man­ag­er or a di­rect fi­nance man­ag­er. Those are group po­si­tions that pro­vide those ser­vices to So­lis,” Bad­daloo de­tailed. 
He not­ed that  40-45 per cent of the staff are ser­vice tech­ni­cians. 

Ques­tioned on whether the de­mand for copy­ing ser­vices has de­clined over the years, due to peo­ple scan­ning doc­u­ments us­ing their phones, the group man­ag­ing di­rec­tor said The Of­fice Au­thor­i­ty sells con­sum­ables such as copy pa­per, and if one looks at the glob­al trends in us­age of copy pa­per, it is not de­clin­ing.  

“It is show­ing a slow but steady in­crease in us­age, an in­crease in con­sump­tion. And while tech­nol­o­gy has dis­rupt­ed pa­per-based us­age in a sense, that is a com­pre­hen­sive state­ment. If you look at trends where far more work­ers, es­pe­cial­ly in de­vel­op­ing coun­tries, are mov­ing from rur­al jobs or in­dus­tri­al-type jobs to more pro­fes­sion­al ser­vices, more of­fice-type work, the us­age and the de­mand for print­ing, for copy­ing is on the rise.  

“So we haven’t seen any drop-off or dis­rup­tion. In the prospec­tus, peo­ple would see that we have ex­pe­ri­enced growth in the com­pa­ny. But one of the us­es of the cap­i­tal that we are rais­ing is to di­ver­si­fy the rev­enue streams of So­lis,” he said. 

As it per­tains to ex­pand­ing the com­pa­ny, Bad­daloo said So­lis has con­tracts in Guyana and the East­ern Caribbean, while those are rel­a­tive­ly small com­pared to the size of the busi­ness, they are good foot­prints for ex­pan­sion in the fu­ture. 

“The abil­i­ty to ac­cess for­eign ex­change for any busi­ness is im­por­tant, so most busi­ness­es would not turn down an op­por­tu­ni­ty to grow their busi­ness, out­side of T&T or re­gion­al­ly. I would say we would be very dis­ci­plined on how we ap­proach it,” he added. 

So­lis is an au­tho­rised deal­er for ma­jor in­ter­na­tion­al brands such as Lex­mark, Kon­i­ca Mi­nol­ta, HP, Broth­er, RISO, Fel­lowes and Sam­sung.