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

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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Premium, First Nations close CAD 1bn Clearwater acquisition

One of the largest seafood sector deals in recent memory has officially closed.

The CAD 1 billion ($788 million) buyout of Canadian shellfish harvester Clearwater Seafoods by Premium Brands Holdings and a coalition of First Nations is now complete, Clearwater said in a press release.

In January, 99.89% of Clearwater shareholders voted for the deal, which will see food group Premium and the coalition of Mi’kmaq First Nations’ joint venture, FNC Holdings, acquire Clearwater at CAD 8.25 a share. The MacDonald brothers Colin and Mickey as well as John Risley previously owned over 60% of the company collectively.

“We are very excited to have a world-class seafood company like Clearwater join our ecosystem,”said George Paleologou, president and CEO of Premium Brands, in a statement.

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Rodger May, McKinley Capital close deal for Peter Pan

US seafood entrepreneur Rodger May and Alaskan private equity McKinley CapitalManagement have closed a deal for salmon and whitefish processor Peter PanSeafoods from Japan’s Maruha Nichiro.

May and McKinley confirmed to Undercurrent News the deal closed on Dec.31. Undercurrent reported the deal agreement on Nov. 2 after first reporting the interest of McKinley and May, who already owns Alaskan seafood distributorNorthwest Fish Company, in July last year.

The deal creates a company with sales of over $300 million, as Northwest Fish generates a turnover of between $100m-$125m with Peter Pan at around $200m, depending on the salmon prices, industry sources told Undercurrent.

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Maruha Nichiro closes deal to offload Peter Pan Seafoods

Maruha Nichiro, the world’s largest seafood company, has finalized the sale of Alaska seafood processor Peter Pan Seafoods, sources familiar with the deal told IntraFish on Monday.

Tokyo-based Maruha Nichiro announced in November it reached a deal to sell the company to an investment group including Alaska-based private equity group McKinley Capital Management and Rodger May, the former owner of Washington State salmon farms now owned by Cooke Aquaculture. The deal closed Dec. 31.

Maruha said at the time it expected a loss of roughly $27.9 million (€23.9 million) on the sale, after several months of unsuccessful efforts to sell the group.

Maruha began the sales process for Peter Pan Seafoods earlier this year, following a dismal 2019 Alaska salmon season. Last year’s salmon season was also a challenge for the group as competition continued to intensify in the state.

Ignacio Kleiman, managing partner at Antarctica Advisors, which is handling the sale, declined to comment on the sale to IntraFish.

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Agri-giants are perplexed by seafood. Here’s how companies can change that.

While seafood has proved resilient during the COVID pandemic, investors remain reluctant.

Ignacio Kleinman, managing partner of Antarctica Advisors, says large animal protein companies are still largely perplexed by the complexity of seafood.

“[They] are used to beef, that comes from only one animal, pork that only comes from only one animal,” he explained while speaking as a panelist for the IntraFish Seafood Investor Forum earlier this month .

He added those sectors might gravitate to salmon or other species that are well-managed, but continue to function in a model that focuses on one species, versus several.

“They find the sector a little riskier,” he said of aquaculture, adding that wild-caught seafood is outright ignored by traditional investors because of risk factors that include product variability and high levels of regulation.

“Not all investors are ready to make that jump,” he said. “Those that have, they have done very well.”

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Antarctica Advisors Acts as Investment Banking Advisor to Clearwater Seafoods Inc. in its sale to Premium Brands Holdings and Mi’kmaq First Nations Coalition

November 11, 2020.  Clearwater Seafoods Inc. (TSX:CLR) has entered into a definitive agreement with a coalition of Mi’kmaq First Nations and Premium Brands Holdings Corp (TSX:PBH) for the acquisition of all of the issued and outstanding common shares of Clearwater and the units issued under various equity compensation plans for $8.25 per share in a transaction valued at approximately C$ 1.0 billion, including debt. The transaction price represents a 60.2% premium to Clearwater’s average volume-weighted price for the 20-day period preceding the strategic review announcement on March 5, 2020. The transaction is expected to close in the first quarter of 2021 following the completion of pending shareholder and regulatory approvals.

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Antarctica Advisors Acts as Exclusive Investment Banking Advisor to Stolt Sea Farm in its sale of Sterling Caviar

November 5, 2020Antarctica Advisors LLC, the leading Seafood Industry-focused M&A advisory firm, acted as the exclusive investment banking advisor to Stolt Sea Farm Investments BV (“Stolt”) in its sale of Sterling Caviar LLC (“Sterling”) to affiliates of Hyde Road Agricultural Associates LLC (“Hyde Road”).

Established in 1988 by Jacob Stolt-Nielsen, Sterling became the first sturgeon aquaculture company to sustainably farm raise the specie globally. Today, Sterling Caviar is the leading producer of domestic caviar, serving the most discerning chefs, customers, and caviar connoisseurs both here in the U.S. and abroad.

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Stolt sells US caviar farming division, stripping away a long-held aquaculture operation

The sale chips away at another portion of what used to be a massive aquaculture empire.

Norwegian shipping, oil and seafood giant Stolt-Nielsen has reached a deal to sell its Sterling Caviar division to land-based bass and sturgeon producer Hyde Road Agricultural Associates, a source familiar with the sale told IntraFish.

Sterling Caviar owns and operates four white sturgeon farms in Sacramento, California. In 1983 it became the first commercial sturgeon farming operation in California, and has long been a part of the Stolt-Nielsen operation.

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Maruha Nichiro sells Peter Pan Seafoods to PE firm, former owner of Cooke salmon farming operation

The company announced in February it was looking to sell off the company, which traces its roots back to 1898 in Alaska.

Maruha Nichiro-owned Peter Pan Seafoods, one of Alaska’s oldest salmon processing companies, has been sold to a group of investors that includes Rodger May, the former owner of Washington State salmon farms now owned by Cooke Aquaculture, and private equity firm McKinley Capital Management.

Officials at Maruha Capital Investment Inc. which owns Peter Pan, along with Westward Seafoods, Alyeska Seafoods, Premier Pacific Seafoods and Trans-Ocean Products in the United States, announced in February it was looking to sell off the company, which traces its roots back to 1898 in Alaska.

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Iberconsa was never likely to attract Asian investment, advisors say

Despite completing deals to expand their supply lines in Northern Europe and North America, major Asian trading giants such as Maruha Nichiro or Nippon Suisan Kaisha are unlikely to take any interest — at least for the immediate future — in buying wild catch enterprises in Spain and Latin America, top financial advisors told Undercurrent News.

Speaking on Undercurrent’s “What COVID-19 Means for Seafood M&A” webinar on June 4, Jose Antonio Zarzalejos — a partner with banking house “It’s not a coincidence that Nomura had the sales side mandate for Iberconsa. They were very clear they wanted to attract interest from Asian buyers, but that didn’t happen.”

Ignacio Kleiman, managing partner at the boutique seafood advisory firm Antarctica Advisors, echoed Zarzalejos’ thoughts on the Iberconsa sale.

“The issues that you have with Asian buyers in many cases are due to scale and often a lack of management capability,” he told Undercurrent. “Even though they are good traders and they purchase products from around the world, they do not [usually] have the management capability expertise for cross-border [deals], to go and take over a major fishing operation overseas.”

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