Post-COVID recovery could see spate of seafood company mergers and acquisitions

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When the world begins to recover from the COVID-19 pandemic, some prominent seafood executives are predicting a busy period of mergers and acquisitions.

Speaking during the National Fisheries Institute’s 2021 Global Seafood Market Conference’s economic outlook panel, seafood company advisors and CEOs said they expect a combination of factors will lead to increased M&A activity. As companies begin to see a turnaround from the COVID-19-related economic downturn, access to cheap financing could spur companies to look for new opportunities, according to Antarctica Advisors LLC Managing Partner Ignacio Kleiman.

“Money is extremely cheap. Some players see it as an opportunity to grow and consolidate,” Kleiman said. Historically low interest rates, coupled with government-promised support for the industry, will likely spur on M&A activity, he predicted.

“When money is that cheap by historical standards – and you know with so much quantitative easing, it’s going to last for a while – those with a strategic vision can take advantage of that,” Kleiman said. Those factors, he said, point to increase activity.

“There are many forces that point toward more M&A, not less,” he said.

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Glenn Cooke, Ian Smith offer timeline for COVID-19 foodservice recovery

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The global COVID-19 pandemic has been a mixed bag for the seafood industry, with retailers notching record seafood sales and the category as a whole seeing gains, even as the foodservice industry virtually collapsed.

That downturn is expected to change direction this year, with foodservice operators optimistic about 2021. Seafood company CEOs and advisors, speaking during the National Fisheries lnstitute’s Global Seafood Market Conference’s economic outlook panel, also expressed optimism about the industry’s recovery. While in the short-term the rebound may be slight, as trend experts have predicted, once relative normalcy returns demand could see a big boost.

“I think the euphoria of people once we get through this is going to be incredible [and] we’re going to see a fast and quick recovery,” Cooke Aquaculture CEO Glenn Cooke said during the panel.

Due to travel restrictions, office closures, and lockdowns, most people haven’t been able to enjoy the restaurant experiences they’re familiar with for months. Cooke and other panel members predicted that will cause a sharp rebound once things reopen.

“As soon as they are vaccinated or in some cases earlier, as the warm weather comes, people are going to escape the cage,” Antarctica Advisors LLC Managing Partner Ignacio Kleiman said.

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Cheap capital fuels M&A push but deals are getting pricier, Cooke says

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Central banks’ responses to the COVID-19 pandemic have contributed to a flood of cheap capital that is adding fuel to the seafood sector’s push to consolidate.

But with more institutional investors, such as private equities and pension funds, getting into the space alongside industry players, company valuations are getting more expensive. That’s at least the view of Glenn Cooke, the CEO and founder of the eponymous Canadian seafood conglomerate.

Cooke, speaking on Feb. 3 as part of a panel during the National Fisheries Institute’s online Global Seafood Market Conference, said that the deal-flow in the sector at present is “on par” with previous years. He added that interest from institutional investors heightens competition for acquisition targets.

“That makes deals a little more expensive,” he said. “You’re seeing multiples on the high side today in seafood, maybe too high, but, for us, we like resource. If we can buy more resource, whether that’s farming or fishing, either one of those resources are of interest for us.”

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