Years of negotiating have come to end with business tycoon Dhammika Perera finally completing the takeover bid of Lewis Brown and Company, the holding company of Delmege Forsyth and Company Ltd, a privately held diversified company which traces its beginnings to the mid-nineteenth century with interests in shipping, insurance, retail, pharmaceuticals and travel and tourism, brokers said.
Two companies controlled by Perera, Vallibel One Ltd. acquired a 51 stake in the company while Royal Ceramics Lanka PLC, a subsidiary, purchased a 19 percent stake. Dhammika Perera, Nimal Perera (Chairman and Deputy Chairman of Vallibel One), A. M. Weerasinghe and T. G. Thoradeniya (Chairman and Executive Director respectively of Royal Ceramics have agreed to acquire the balance 30 percent of Lewis Brown and Company, a stock exchange filing said.
The entire deal was concluded for Rs. 3.1 billion. The acquisition includes 2 acres of prime property in Colombo where Delmege offices and warehouses are located. "Negotiations lasted several years," a broker said.
Delmege Forsyth recorded a net profit of Rs. 250 million for the recently concluded financial year.
Its group of companies include; Delair Travels, Delair Holidays, Delair Events, Delmege Distributors, Delmege Forsyth and Company (Exports), Delmege Forsyth Tours, Delmege Freight Services, Delmege Shipping Services, Delmege Construction Products, Delmege Insurance Brokers, Delmege Interior Decor, Delmege Medical and Lewis Brown Air Services. All of these are registered as private limited liability companies.
Delmege Forsyth imports a range of products under the categories of food and beverages, medical and laboratory equipment, power tools and white goods, consumer electronics, flooring, hot water pipes, pharmaceutical and office furniture.
Its export basket includes coconut fibre products, organic fertiliser, spices, tea, handicrafts, cut flowers and foliage.
Delmege Forsyth & Co. Ltd can trace back its beginnings to 1850, when Alexander Reid, a merchant established a businesses on Pedlar Street, Galle. Fifteen years later, in 1865, two brothers, Sam and Toby Delmege arrived in Sri Lanka, then known as Ceylon, and went into partnership with James Reid who succeeded the business from Alexander Reid. They set up offices in Colombo and Galle.
The company says that there are records to suggest that "the Delmege brothers had been working as pilots and collectors in the Mississippi River Steamer Service and had made a fortune in ‘running the blockade’ during the American Civil war. After the war they left America to settle in Sri Lanka".
Vallibel One Ltd is an investment holding company controlled by Perera. It is planning to raise Rs. 532 million through an IPO of 21 million shares at Rs. 25 each. Earlier this year, Vallibel One raised Rs. 4.9 billion through a private placement of shares which were also prices at Rs. 25 each. The subscription lists for the IPO opens next Tuesday (21).
These funds are expected to be used to construct a 300-room hotel in Negombo estimated at Rs. 5.6 billion as it plans to diversify into the leisure and power sectors.
The company said it would not use the IPO funds to finalise the Lewis Brown acquisition, which would be funded by the company’s own funds and borrowings, if necessary. Sources said the new owners are planning to list Delmege Forsyth on the Colombo Stock Exchange as well.
source - www.island.lk
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