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Merger, which is subject to the required approvals, will see synergies in administration costs and the combination of offices and warehousing in Barbados, Jamaica

Documents and information technology (IT) company, Productive Business Solutions (PBS) is merging with Massy Technologies out of Trinidad and Tobago, which is also in the IT business.

The planned merger is subject to the required approvals from stakeholders and when executed will increasing PBS’s addressable market, diversifying its product mix and expanding the geographical reach. The amalgamation will see synergies in administration costs with implementation of the PBS ERP system and the combination of offices and warehousing in Barbados and Jamaica.

The merger has been made possible by PBS parent company, the Musson Group, which earlier this year acquired Massy Technologies from the Massy Group. Massy Technologies has operations in its base of Trinidad and Tobago, which is said to be the largest IT market in the Caribbean and Guyana, which is the fastest growing economy in the region.

Merger will see addition of 500 IT professionals to the PBS family

Of note is the fact that PBS doesn’t have a presence in these two markets. PBS Chairman PB Scott, who made the disclosure in a letter to shareholders, stated that with the merger the company will welcome over 500 IT professionals to the family.

PBS has a staff compliment of 1,600 professionals drawn from operations in 16 countries.

“We truly believe that in this case the ultimate combination will strengthen both companies’ capabilities and will be a simple case of two plus two equaling six,” Scott advised shareholders.

He reiterated that PBS’s focus will continue to be people and customer led, investing even further to continue the development and growth of the business. In his forward to the company’s 2020 annual report Scott reported that 2020 was a challenging year for which the company had to adapt and do so quickly but, even so, profits after tax declined, as print volumes fell.

However, structural changes in addition to cost reduction implemented in 2019 were made quickly, which allowed its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITA) to remain flat, thus maintaining cash flow in 2020 over 2019. EBITA is a measure of a company’s overall financial performance and is used as an alternative to net income in some circumstances. 

With PBS managing to keep its EBITA flat in the pandemic year, the company’s chairman remarked that, ”this was a remarkable achievement and points to the resilience of the business model”.

Opportunities opening up and will be exploited in 2021

He explained that while the company faced several national lockdowns in several countries, closure of clients’ offices as well as supply chain disruption on a scale not seen before, it also faced new opportunities. These include a significant demand for IT products for the education channels and for businesses pivoting to work from home.

Scott declared that many of these opportunities will be exploited in 2021. For his part, Pedro M. París, PBS chief executive officer advised that the most impacted line of business was the printing division, which  affected the company’s revenue by 10.1 per cent. As a result, the gross profit decreased 10.99 per cent and the expenses excluding depreciation and amortization were reduced 13.8 per cent lower than the previous year.

This allowed the company to close 2020 with an achievement of 82 per cent of the planned EBITDA. These results, he said were above what the industry achieved in 2020. París emphasised that, “on a high note, the last quarter of the year was the second-best ever thanks to the contribution of the IT and Services business lines”.

Looking forward, he stated that “PBS is working together with XEROX to grow the print volumes composed by supplies, paper, maintenance, click charge, lease, and rental charges, which were heavily hit by closed offices, public buildings, schools, and entire economic sectors where it is located”.