The Tribune

• Easy Car Sales to ‘accelerate’ growth via RF tie-up

• To expand staff, restart in-house finance and leasing

• Private equity fund’s buy-in ‘huge vote of confidence’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian electric vehicle dealer yesterday unveiled plans to expand to “a major location” and grow its workforce after becoming the first investment for RF Bank & Trust’s newly-launched private equity fund.

Pia Farmer, partner at Easy Car Sales, told Tribune Business the tie-up with the Bahamian investment bank’s Strat Equity Fund will “accelerate” the company’s growth and also enable it to relaunch its in-house financing and vehicle leasing operation “in the next few weeks’.

While declining to specify how much RF’s private equity fund has invested in the dealer, or the size of the equity stake it has taken, she confirmed it is a minority shareholder and pointed to the fact that the bank previously said it was targeting investments between $5m-$10m in Bahamian companies it believes have strong growth potential.

Ms Farmer told this newspaper that the Strat Equity Fund’s participation was “a huge vote of confidence” in both Easy Car Sales and the wider growth potential of the electric vehicle market, which she asserted will account for one-third of all autos sold in The Bahamas by 2030.

With the dealership “looking good” to meet this year’s target of a 50 percent increase in sales compared to 2022, taking the total to around 280, she added that it was also maintaining its 10 percent share or all Bahamian auto purchases despite the market’s overall expansion for 2023.

Besides the Strat Equity Fund’s capital injection, Ms Farmer said it and RF will also bring “knowledge, experience and financing tools” to help speed up Easy Car Sales’ growth plans as well as enable more Bahamian investors to have an ownership stake in “transportation’s transformation”.

“It’s a great benefit to Easy Car Sales to have RF show such confidence in our plans, in our vision and in our product, and also have so much faith in our team to deliver profits for investors and benefits to people who invest in the Strat Equity Fund,” she told Tribune Business. “For us, it’s significant in terms of an injection not only of capital but knowledge and experience from RF. They have a lot of expertise and tools to help us advance more rapidly......

“It’s going to help us to grow. We have already outgrown our current location. One of the plans is an expansion to a new location, headquarters and showroom. We’ve just added an additional brand in Jac Motors, and we need more space and we need more team members. It’s going to help us expand physically on what we’re able to do.”

Confirming that this involves a move from Easy Car Sales’ current site on Gladstone Road, Ms Farmer declined to identify its new home on the basis that the real estate transaction is “still being closed”, but added that it will be to “a major location” on New Providence.

“Our staff has grown in the last two-and-a-half years from six people to 18 people, all Bahamian and all committed to changing the world of transportation,” she said. “We have been adding new team members” and Easy Car Sales still needs to expand “by a significant number of people”.

“We were growing very fast,” Ms Farmer continued. “We were doubling sales, we were expanding team members and growing quite rapidly in the last two-and-a-half to three years. This will allow us to even accelerate this speed, which is pretty intensive.

“It will also enable faster adoption of electric vehicles. It will spread the wealth to other people who can now invest in it, and it will add much-needed jobs in a new field. When you get into this field you will be busy for the foreseeable future. These are good-paying jobs where people will learn new skills for new growth and accelerated growth....

“We are now going to be doing in-house financing again in the next few weeks, which we had stopped doing - leasing and in-house financing.” Ms Farmer said the investment by RF’s Strat Equity Fund, which is aiming to fill “a huge void in the market” by providing Bahamian businesses with much-needed equity capital to jumpstart the expansion of their enterprises, will also help Easy Car Sales bring in increased electric vehicle and new brands.

“We have a new brand now, so we will be bringing more options to the table,” she added of Jac Motors. “If we want people to switch to electric transport then we have to give them the models they want at a price that is competitive. We just received something in the order of 120 new vehicles in the last couple of weeks. Thirty of them are leaving shortly. They were already spoken for before they landed.

“What they’re [RF] doing with the Strat Equity Fund is they are selecting companies that have the promise of profits and growth. For us, it’s a great vote of confidence. It’s going to enable more people to have an ownership stake in the electric vehicle market. Not only can they invest in owning an electric vehicle, they can be part of a growing business and profit from it.

“For me it’s important that as many people in The Bahamas as possible become shareholders in this technology revolution because transportation is being transformed.” Private equity funds, such as the Strat Equity Fund, work differently from how traditional mutual and investment funds have operated in the domestic Bahamian capital markets.

While the latter acquire shares in companies, these tend to be firms that are publicly traded and listed on the Bahamas International Securities Exchange (BISX), with positions often held for the long-term.

In contrast, private equity funds acquire shareholdings in private companies with the goal of turning these firms around, generating returns for their investors by making them more profitable and efficient before recovering the initial principal outlay by seeking an exit route for their investment. This is often done by taking the firm public via an initial public offering (IPO), and the Strat Equity Fund will typically seek an exit after five to seven years.

Ms Farmer described the Strat Equity Fund’s creation, and the thinking behind it, as “a brilliant idea” and acknowledged that RF was already talking to several other private companies about acquiring an equity stake in their business just as it has done with Easy Car Sales.

“People can invest in Bahamian companies with growth potential and keep their money at home with investments in local companies,” she added. “One has to negotiate the best agreement for one’s own company. We have a very cordial, clearly laid out relationship [with RF] that sets out the responsibilities but the leadership stays with the managing partner, myself and John [Farmer].

“It’s a partnership that we expect to run smoothly and don’t see any problems. We had many meetings and are working together very well. Conversations were ongoing for months. It’s not a majority shareholding [for RF]. We’re just expanding faster, and they will advise and help us to reach our goal.”

Ms Farmer said there was “more work to be done” now that Easy Car Sales has partnered with the Strat Equity Fund and its investors, and added: “Right now we are still targeting for this year to increase sales from last year by 50 percent to 280. We’re still working on that. We’re looking good but it’s a seasonal thing and it’s hard to tell until the Fat Lady sings.

“We’re still close to 10 percent market share of all new car sales right now, which is what we anticipated. We’re still at that level, but car sales have increased this year so we’re keeping up the percentage. We are feeling very optimistic and very happy that other people believe in what we’re doing other than our drivers. It’s nice when someone of the calibre of RF has confidence in what we’re doing.”