Stony Hill Capital acquires block of Lumber Depot shares

Stony Hill Capital, an investment vehicle controlled by the family that owns the Musson conglomerate, has acquired a block of shares in Lumber Depot Limited, giving Paul ‘PB’ Scott and Melanie Subratie seats on the board of the hardware company.

The size of the share acquisition was not disclosed, but the announcement of the board additions comes days after a block of 141 million Lumber Depot units changed hands on December 3 — reflecting the largest block trade since the stock was listed in 2019. The second largest was 28 million units on September 6.

“Stony Hill Capital is in the business of making good investments,” Scott, the chairman and CEO of Musson Group, told the Financial Gleaner after the announcement of the directorships.

“The business is very well run and has produced great results, and the market that it is in, we believe, will continue to grow – a great combination for an investment,” he said.

Scott also noted that Stony Hill Capital Limited is not a member of the Musson Group, but that it holds investments in some businesses that family members are also invested, including Stanley Motta and Eppley.

Lumber Depot Limited was spun off from Blue Power Group and listed on the junior market of the Jamaica Stock Exchange two years ago, in December 2019.

The company has a market value of $2.17 billion, or $3.09 per share, which is five times its book value of $402 million. Of the 706.2 million issued shares, the largest holders of LUMBER stock as at October 31 were Mayberry Jamaican Equities with more than 132 million shares, Blue Power with just under 102 million, and Kenneth and Sheila Benjamin with nearly 60 million units.

Lumber Depot Chairman Jeffrey Hall also made no comment on the size of the acquisition, speaking only to the addition of the Musson siblings to the board.

“Both PB Scott and Melanie Subratie have excellent track records in business generally, but also a demonstrated commitment to Jamaica’s development,” said Hall. “I am very pleased with their expression of interest in Lumber Depot Limited,” he said.

The acquisition adds to family-connected’s holdings in the construction/real estate sector, which includes Stanley Motta. Additionally, Musson member company Felton provides property management services for Stanley Motta Limited, both of which are headed by Subratie.

Lumber Depot, in newly released financial results, posted half-year profit of $107 million off revenues of $760 million, bettering the $66 million of net profit and $700 million of sales recorded in the comparative May-October 2020 period.

The company has operated a hardware store from Papine in Kingston for over two decades, which serves building contractors as well as homeowners conducting renovations and repairs.

business@gleanerjm.com

UPDATE: The story has been updated to remove any suggestion that Stanley Motta and Eppley are member companies of the Musson Group and to add the business connection between Musson member company Felton and Stanley Motta.