Columbus

"Today, overnight shipping is a way of life—order something from Amazon and it’s on your doorstep within days or even hours. Risley was ahead of the game by decades, developing rapid air shipping of lobster to Europe and Asia in the late 1970s and early ’80s. With Ocean Nutrition, Risley foresaw opportunity in the burgeoning nutrition, health, and supplements marketplace. Columbus, meanwhile, rode the wave of massive internet expansion during the 2000s. In other words, Risley has been a pioneer and innovator in three very different industries—in each case riding on the crest of global forces."

"Columbus’s immense growth over the next decade—from startup to significant competitor of the incumbent Caribbean telcos—is partly explained by how swiftly it moved in making decisions and acquisitions. This is perhaps best illustrated by the fact that Paddick and Risley purchased Merit Communications, a small Jamaican internet and phone company, before closing the Cable Bahamas deal."

"In all, Columbus did about fifty acquisitions between 2005 and 2015. That period also saw Columbus lay thousands of kilometres of cable throughout the Caribbean, including between Jamaica and the Dominican Republic, from Colombia to Ecuador, and across Panama, Costa Rica, Guatemala, and El Salvador. “We were an attacker for ten years. We basically built a network like stink and competed like stink as best we could,” Paddick recalled. “Our job was to build the best network in the region and make sure whatever came next worked best on our network. And that’s what we did. And what ended up happening was not only did the next killer apps like Netflix work best on our network, but all the other carriers in the region put down their pens and their capital budgets [for] building networks that were similar to ours and said, ‘We’ll use your network [to carry our traffic].’ That was a real game changer.”"

"Though Columbus involved telecommunications in the sun-soaked Caribbean, its genesis can be traced back to cold, grey Newfoundland and Labrador, and Risley’s offer of an FPI board seat to Brendan Paddick, then president of Regional Cablesystems, a cable company based in St. John’s. That offer launched a business partnership and a friendship which would be among the strongest of Risley’s life. It would also lead Risley on the Caribbean telecom journey that would propel his wealth to a new level."

"Building that network was expensive, however. Columbus’s expansion was funded with US $ 1.25 billion—including from banks like Citi, RBC, and Scotiabank, the largest retail bank in the Caribbean, as well as further investment from CFFI. During one cash call, Michael Lee-Chin found himself short on funds. “I didn’t have the liquidity then. So John said, ‘It’s OK, Mike, don’t worry—I’ll put it in. Pay me when you have the money.’"

"As the closing of the Cable Bahamas deal approached, in early 2005, Paddick got a call from an RBC manager in Freeport: US $ 50 million had been wired to Paddick’s personal bank account. Risley had sent his share of the Cable Bahamas purchase funds without any of the usual, formal protections sought by investors; he’d sent US $ 50 million like it was an e-transfer to pay a plumbing bill. “There was no escrow agreement.... There wasn’t a piece of paper, there wasn’t a contract, there was nothing,” Paddick recalled. “There was just trust.... And it was something that would repeat itself numerous times over the life of Columbus.”"

"Risley did not live in the Caribbean during his time as a Columbus founder and investor, nor was he involved in the day-to-day running of the company. Like his involvement with Clearwater and Ocean Nutrition at the time, he was on the board. In the case of Columbus, he was focused on the larger strategy: dealmaking, meeting with banks and raising the capital necessary for expansion."

"Cable & Wireless’s offer of US $ 3.1 billion was $ 1 billion above Digicel’s—thus easily ruling Digicel out—and $ 175 million richer than Liberty Global’s offer. Cable & Wireless’s proposal was enticing—a premium of 12.5 times forecasted EBITDA for the next year. Risley wanted to accept but Paddick felt he could milk a few more drops from Cable & Wireless’s new CEO. He called Bentley on a Saturday and though he didn’t name the second-place bidder, offered enough clues to identify it as Liberty Global. Bentley would have expected Paddick and Risley to choose Liberty Global if it came down to a close contest, given that Malone was a Columbus shareholder. So Paddick told Bentley he had to sweeten Cable & Wireless’s offer. It was a bold play: Paddick claimed he needed space between Cable & Wireless and Liberty Global even though Cable & Wireless was already the highest bidder—by nearly $ 200 million."

"“I was just trying to get more money,” Paddick told me. “I had a guy [Bentley] who was basically sitting there going, ‘Holy shit, I can spend the next ten years rebuilding my piece of crap network while Digicel and Columbus and others continue to pick away at me... or I can go acquire the biggest thorn in my side who have all brand-new fibre-based networks.’ He just had to have this deal. You could smell it a mile away. So I was just basically squeezing the blood out of the turnip at that point.”"

"“He’s been close [to the edge] a lot of the time,” said Hugh Smith. “It’s just a question of who gets paid. Then he sells Ocean Nutrition—gets a windfall. Sells Columbus—gets a windfall. Sells Clearwater. All these core assets get sold and the money just goes....” Smith then made a sound to convey money disappearing in all directions. “He leaves nothing on the table. Nothing. And that was my biggest advice or caution to him: when you have a windfall, it’s not shameful to tuck some away,” Smith continued before letting out a jolly laugh. “In defence of him, a lot of it is feeding the liabilities.... If you make $ 100 million selling Clearwater and you’re building a $ 200-million boat, well, it’s hard to get the math.”"

"The Italian Columbus, who discovered the American continent, was denied assistance by the Portuguese royal family for his voyage and departed with the support of the Spanish royal family. Columbus was thus a manager, with the Spanish royal family acting as investor. This set up Columbus' business plan of "aiming for the New World with this type of ship on this route", and the Spanish royal family agreed to invest in it. Agreements were made in advance about the distribution of profits, with Columbus receiving 10% of the profits from the admiralship territories if successful, gaining a share of the profits in proportion to investment in future voyages, and acquiring lifelong admiral rights to the lands discovered. Thus, as a manager aiming for India, Columbus reached the American continent in 1492 with the investment from the royal family. The spoils taken in the New World were returned to the Spanish royal family as dividends."

"As soon as the deal was announced, Bouchard declared that Couche-Tard’s objective was to increase the number of establishments in its new American Midwest division from 225 to 600. It would take place through small acquisitions, and by building new convenience stores inspired by the “Strategy 2000” concept. To succeed, they had to rely on the management team already in place in Columbus, whose jobs Couche-Tard had promised to protect."