‘The main reason why we did it is obviously that they’re a big player in domestic and imported scallops and we’re a big player’ — Ken Melanson, Atlantic Sustainable Catch

Don’t look now but a giant scallop-shaped creature has risen off the coast of the US state of Massachusetts. It’s Northern Wind.

There were multiple motivations for Atlantic Sustainable Catch (ASC) to acquire the downstream division of Atlantic Capes Fisheries and fold it into its New Bedford, Massachusetts-based operation, merging two major US scallop producers to create one giant, Ken Melanson, ASC’s chairman and CEO, told Undercurrent News in an interview on Thursday (Jan. 16).

The deal gives Northern Wind — acquired by Washington, DC-based investment firm Acon and rolled into ASC in October 2021 — a much larger footprint in the scallop arena and makes better use of existing facilities, he said.

Northern Wind will now have combined production of about 20-22 million pounds (9,070-10,000 metric tons) of scallops annually, Melanson estimated. That includes roughly 10m lbs of domestically caught scallops and 10-12m lbs of imported scallops, he said.

That would account for roughly half of all the scallops sold in the US, based on National Oceanic and Atmospheric Administration (NOAA) landings data that shows 16m lbs harvested domestically and NOAA trade data that projects to roughly 26m lbs of imports in 2024.

At a minimum, such numbers would make Northern Wind one of the world’s three largest scallop producers alongside Eastern Fisheries and East Coast Seafood’s Seatrade International, which are also based in New Bedford, sources advised.

“The main reason why we did it is obviously that they’re a big player in domestic and imported scallops and we’re a big player,” Melanson said of the deal involving Atlantic Capes, adding: “With the quotas going to where they’ve been going, and they continue to go down, we’re at like 30% capacity in our facility here.”

The facility Melanson mentioned is Northern Wind’s 120,000-square- foot processing operation in New Bedford, which went through a major $12m expansion in 2019. It’s been upgraded practically every year since, he said.

By relocating Atlantic Capes’ scallop production out of its roughly 60,000-70,000 square foot processing facility in Fall River, New Jersey, the New Bedford plant instead will be able to operate at about 85% of its capacity, Melanson estimated. Fall River will be the plant used to handle other production, including especially co-packing and value-added products, he said.

“We close this deal, and there’s basically no CapEx that we need to do,” he said.

Another motivation for the acquisition was that the companies had little overlap. Melanson said Northern Wind was strong in club store, foodservice and wholesaler relationships, while Atlantic Capes had better ties with small supermarket chains and other retail outlets.

Melanson confirmed that the deal for Atlantic Capes makes ASC a roughly $500m-plus-turnover North American shellfish group as earlier reported by Undercurrent. The acquisition includes Atlantic Capes’ Galilean Seafoods, a large hand-shucking plant in Bristol, Rhode Island.

Overseeing the sale was Barry Cohen, a lawyer who took over as chairman of Atlantic Capes after the death of his brother, Danny, who built up the company. The family was guided in its sale by Antarctica Advisors, a seafood-focused corporate finance boutique, as earlier reported.

Also, as reported earlier, Jeff Bolton — a 21-year executive and the former CEO at Atlantic Capes — has been named president at ASC, though Melanson remains in the top spot as the CEO and chairman of the parent company.

Other management moves are not expected as a result of the merger, Melanson said.

“For the most part, all of the management team [at Atlantic Capes] came along and, we’re a month into it, but it seems to be going well. So yeah, everybody, mostly all of the employees that were working at Atlanta Cape, for the most part, have joined us,” he said.

Holding the highest post at a $500m seafood firm is impressive for Melanson, a New England son who began working in the seafood industry as a fish cutter when he was just 18 — 50 years ago — and co- founded Northern Wind in 1987 along with Michael Fernandes.

The Cohen family will retain its large fishing fleet of 17 vessels, which handle scallops among other species, as part of the deal, Melanson said. But the vessels will maintain a “tether agreement” that commits their scallop catch only to ASC companies.

ASC gained control of the Atlantic Capes Fisheries name for use on products for at least 18 months, Melanson said. However, the company will likely migrate all Atlantic Capes products to be sold under NorthernWind’s four main brands: Five Star Premium Scallops; Captain’s Call for Scallops; Mariner’s Choice Scallops; and Sea Spray Scallops.

However, Melanson said Northern Wind would add a new brand if itmade sense.

Why the deal took so long

Undercurrent began reporting on talks between ASC and Atlantic Capes as long ago as 2021. It emerged Acon’s ASC was the only remaining bidder for the company in January 2023 before a letter of intent was signed in April of the same year.

Then, during the 2024 Seafood Expo North America in March, sources said talks were still on, and a deal was close. At the time, one executive said an agreement could be reached before the start of the new scallop season in April 2024. This prediction proved to be optimistic as the
deal only closed a few weeks ago.

What took so long?

“It was just a complicated deal, and the reason why it was mostly complicated is because we didn’t buy the whole thing,” Melanson answered. “We didn’t buy all the boats. We just bought the IQF custom packing and the marketing division. So we have to separate a bunch of stuff, and certainly, when you get two people in a room, and somebody thinks it’s worth $5 and you only want to pay a dollar for that particular piece of it, it’s complicated. It just really is.”

He added: The [transition service agreements] and stuff were 40 pages
long for crying out loud.”

But the conditions in the scallop market were ripe for consolidation, Melanson said. As reported by Undercurrent, the New England Fishery Management Council voted, 15-1, on Dec. 5 to recommend a new set of Atlantic scallop harvesting rules that would result in projected landings of 19.75m lbs worth $348.25m during the 2025-26 season, which begins on April 1, 2025.

That would represent a 25.6% reduction from the 24.2m lbs in projected landings for the limited access fleet during the 2024-25 season. However, because the catch this season looks more likely to wind up far less than that projection, next year’s harvest might not compare quite as badly.

“Obviously, we’re going to get a little bit of a haircut in the 2025 quota,” Melanson commented. “You see imported scallops getting more expensive. The price of Japanese scallops went from $9.00 a pound to $15.00/lb. You see now domestic go from $14.00, $15.00/lb to $22.00,” he said.

“Anybody who understands our business knows that you need to buy 80% to 90% of all of your needs in the first month of the season, which is only five, six months. That’s it. And if you don’t cover that then, and you’re trying to buy scallops like they’re doing now or paying these prices, then you’re not in the scallop business.”

Decision pending on future acquisitions

Might ASC soon make other acquisitions? Answer: Melanson said there’s nothing currently in the pipeline but he wouldn’t rule it out.

“We’re always looking for deals,” he said. “When you are with a private equity, that’s what they do.”

Melanson spoke generally about the kinds of acquisitions Acon might make in the future, saying the company wants “to get as close to the resource as possible and get to the end user deep, deep into the market on the retailer side.”

Melanson was careful to note that ASC sells other products, too, including squid, tuna, clams, crawfish, mahi-mahi, snow crab, and alligator meat. The two key species, however, are scallops and lobster, he said.

 

SOURCE: Undercurrent News.

Many of Undercurrent News’ major scoops on seafood mergers and acquisitions (M&A) from last year are on story trends that will run into 2025.

Last year was a dynamic one for seafood M&A, with ACON Investments, Captain Fresh, Cooke and Pacific Seafood Group all getting big deals over the line by the end.

However, other big, planned sales, such as US at-sea pollock processor American Seafoods Group (ASG), European seabass and seabream farmer Avramar Seafood, or EU salmon processor Milarex, are on ice or in the works as 2025 gets underway.

As the year closed, UK private equity CapVest Partners’ foray into US smoked salmon production was also on hold.

Then, other major stories — such as the consolidation fest in processing in the US state of Alaska or Japanese seafood companies looking to global M&A — look set to accelerate in 2025.

Below, Undercurrent has highlighted several M&A scoops or story trends that will continue to make waves in 2025. Look out for the second part of this story shortly.

Can Bregal find a $1bn-plus buyer for American Seafoods in 2025?

Bregal Partners, the controlling shareholder in ASG, the largest at-sea pollock processor, halted yet another sale process mid-year as offers reportedly fell below $1 billion.

The cause of the drop in valuation, which saw Bregal and US investor Beach Point Capital Management end talks, was the weakness in pollock fillet and surimi prices in 2024. There are already signs that fillet prices are rising, and surimi has hit the bottom, which could bode well for a Bregal exit from ASG in 2025.

Meanwhile, as first reported by Undercurrent in December 2024, former CEO Einar Gustafsson is mounting a bid for ASG. According to sources,

Gustafsson plans to involve several other parties in his bid, with one reportedly an Alaskan community development quota group, Coastal Villages Regional Fund (CVRF).

A spokesperson for CVRF told Undercurrent it’s not involved in “active negotiations” for ASG but is interested in getting bigger in pollock. Gustafsson has not responded to requests for comment. Watch this space in 2025.

What next for Acon after finally closing Atlantic Capes deal?

After Undercurrent first reported a formal sale process for US clam and scallop giant Atlantic Capes Fisheries back in 2021, a deal finally closed at the end of last year from US investment firm Acon.

Undercurrent was the first to reveal Acon had netted the downstream part of AtlanticCapes with its AtlanticSustainable Catch (ASC)platform. ASC consists of Northern Wind, a large US scallop processor, and two Canadian lobster firms, Suncoast Seafood and Raymond O’Neill & Son Fisheries.

With US scallop supply low in 2024 and set to drop further in 2025, all eyes in the sector will be on what Acon does with Northern Wind and Atlantic Capes.

Captain Fresh aims for 2025 IPO after CenSea, Koral buyouts

Highly prolific Antarctica Advisors worked on the sell side of AtlanticCapes for the Cohen family, having also been involved in two dealsinvolving India’s Captain Fresh in 2024, for Koral and Central SeawayCompany (CenSea). Undercurrent covered both deals from sale process to close.

Utham Gowda, founder and CEO of Captain Fresh, gave Undercurrent some insight into his future M&A and business development plans in an exclusive interview in August 2024.

Gowda spoke of going into US salmon processing, having closed its deal for Polishsmoker Koral at the tail-end of 2024. Undercurrent first reported the agreement in July, having revealed Captain Fresh was in talks to buy the salmon smoker at the end of 2023.

Then, it seems an initial public offering (IPO) will also be on the cards in 2025. Gowda is reportedly eyeing a valuation of as much as $ 1.5bn for the IPO. He first told Undercurrent of the IPO plan in March 2024, during the annual Seafood Expo North America (SENA) show in Boston, Massachusetts.

SENA was a milestone for Captain Fresh, as Gowda had just closed the long-awaited deal for CenSea, a frozen shrimp importer based near Chicago, Illinois, at the end of February. In June2023, Undercurrent
First reported that the Feigon family, who built up CenSea, was eyeing a sale, with Antarctica recruited to run the process. Then, also in June,
Undercurrent first reported that Captain Fresh was looking at CenSea.

In early 2024, Undercurrent also revealed that Captain Fresh had quietly entered the European shrimp sector in 2023 with a deal forSenecrus, a 40-year-old, Paris-based shrimp cooker and distributor.

Alaska M&A: Silver Bay on offensive, Peter Pan collapse, Trident fire sale

The forced consolidation in the Alaska processing sector looks set to continue in 2025 after a frenetic 2024. On Nov. 20, 2024, Undercurrent reported that Silver Bay was in talks to take control of OBI Seafoods’ 10 plants and buying stations in the US state.

The planned deal from Silver Bay, which sources said is in the works for 2025, came at the end of a frenetic year of forced M&A in the state. Silver Bay, owned by a group of Alaska fishermen, took control of Peter Pan Seafood, which spectacularly imploded in the year.

At the end of 2024, Pacific Seafood Group also closed a big move in Alaska, buying Trident Seafoods’ large plant in Kodiak.

The Trident-Pacific Kodiak deal was one of four the Seattle, Washington-based giant did in 2024 in a dramatic fire sale — after offloading facilities in False Pass, Petersburg, and Ketchikan.

Silver Bay bought the Ketchikan plant with E.C. Phillips & Son taking Petersburg. The Aleutian Pribilof Island Community Development Association, known as APICDA, partnered with Silver Bay on the deal for the former Trident False Pass plant. Undercurrent first reported APICDA’s involvement in the deal earlier in the year.

European bass, bream giant to be sold in Q1

A major piece of European M&A is set to close in Q1 of 2025, whichwill bring a new investor into the seabass and seabream sector.

The United Arab Emirates-based firm Aqua Bridge Group is in advanced negotiations to acquire distressed aquaculture company Avramar’s Greekassets, though a deal has yet to be finalized, sources familiar with the process told Undercurrent on Dec. 17.

Negotiations seem to point toward Aqua Bridge buying all of Avramar’s Greek assets, including fish farms, operating licenses, and plants. The Spanish assets would remain under the control of Avramar’s current main shareholder, AMERRA Capital Management.

In October, Undercurrent reported that Abu Dhabi’s MubadalaInvestment Company, previously Avramar’s second major investor, exited its equity stake, selling its shares to Amerra.
Undercurrent covered the sale process, run by Deloitte, from the start.

Also, in 2024, Turkey’s Kilic Holding formally announced the acquisition of Agromey, one of the country’s largest producers of bassand bream.
Undercurrent first reported the prospect of a deal — whichwill take Kilic to around $500m — in 2023.

Where will Cooke look next on M&A after bumper fishmeal buyout?

Canadian seafood giant Cooke had a quiet 2023 and 2024 on M&Auntil the end of November, when it closed the buyout of CorporacionPesquera Inca (Copeinca), one of Peru’s largest fishmeal and fish oil companies.

Undercurrent first reported Cooke was in the running forCopeinca back in July, with Dutch seafood giant Parlevliet& Van der Plas also in the hunt at the time.

Cooke will likely look”everywhere” at more M&A in2025 but will also take some time to digest Copeinca, sources said. In 2023, Cooke only made one deal, Slade Gorton & Co. The year before, Cooke moved into Australian salmon farming, snapping up Tassal Group.

 

SOURCE: Undercurrent News

February 29, 2024 – Antarctica Advisors LLC, the leading Seafood Industry-Focused M&A advisory firm, acted as the exclusive investment banking advisor to Central Seaway Company Inc. (“CenSea”) in the sale to Captain Fresh, an India based multi-species multi-origin seafood player.

Established in 1960, CenSea is widely recognized as a market leader in frozen seafood distribution in the U.S. serving major clients in both foodservice and retail markets. With revenues exceeding $350 million, this acquisition provides Captain Fresh with a strong foothold in the U.S. seafood market and represents Captain Fresh’s first significant investment in the U.S. seafood distribution sector.

Antarctica’s specialized Seafood M&A Team provided CenSea with full-fledged M&A advisory services by marketing the opportunity, identifying the buyer, and structuring and negotiating the transaction towards a successful completion.

“We are extremely proud of what CenSea has accomplished as a family-owned enterprise. We now move forward with a united team and a common goal to continue building and growing an industry-leading company. Antarctica’s transaction team was instrumental in bringing this complex cross-border transaction together by leveraging their knowledge and experience in the seafood industry.” said Nate Torch and Jeff Stern, Co-Presidents at CenSea

“CenSea is one of the most reputable brands in the Seafood Industry and recognized as an industry leader in the U.S.  This highly strategic transaction will unlock global growth potential for the future of CenSea and Captain Fresh. Our specialized Seafood M&A Team worked closely with both management and shareholders throughout the process in bringing this transaction to a successful completion.” commented Birgir Brynjolfsson, Partner at Antarctica Advisors

Antarctica Advisors LLC is a U.S.-based, independent investment banking firm providing clients in the global Seafood Industry with specialized domestic and cross-border, industry-focused M&A advisory as well as private equity and debt capital raising services.

For media inquiries, please contact Info@AntarcticaLLC.com or visit www.AntarcticaLLC.com

India’s Captain Fresh is in talks to raise a further $50m from investors as part of the financing for the planned acquisition of US shrimp importer CenSea

India’s Captain Fresh is in talks to raise a further $50 million from investors as part of the financing for the planned acquisition of US shrimp importer, with a deal for a European salmon processor set to follow later in the year, sources told Undercurrent News. As Tech Crunch reported the plans to raise the $50m, Undercurrent sources said the deal talks to buy $300mturnover US shrimp importer Central Seaway Co. (CenSea) are very advanced.

“It sounds like the deal [for CenSea] is close. I’d say weeks away,” one source, who asked not to be named, told Undercurrent. Two more sources with knowledge of the talks confirmed the situation. It’s likely the deal will close before Seafood Expo North America, which takes place in Boston, Massachusetts, March 10-12, they said. CenSea’s management team, led by Joe Rosenberg, Jeff Stern and Nate Torch, declined to comment to Undercurrent. Utham Gowda, CEO and founder of Captain Fresh, which has 80,000 metric tons of seafood going through its Indian platform, did not respond to a request for comment.

Executives with Antarctica Advisors, which is running the sale process for CenSea, also did not respond to a request for comment.

According to Tech Crunch, Captain Fresh is in the “advanced stages” of raising $50m from Nekkanti Sea Foods and venture capital firms SBI Investment, Evolvence, Tiger Global, and Prosus Ventures. Nekkanti, one of India’s largest shrimp processors, led an extended Series C fundraising with $6m, Startup Story reported in January.

The extended Series C is also mentioned by Tech Crunch, which reported it was $15m in total. Prior to the new $50m funding, Captain Fresh had raised over $100m and was valued at $500m in its previous round.

Nekkanti was one of Captain Fresh’s first investors. Captain Fresh CEO Gowda worked for Nekkanti from 2018-2019 as the shrimp processor looked at an initial public offering. He previously worked in banking.

EU salmon deal

Captain Fresh’s planned deal for Polish smoked and fresh salmon processor Koral, which is majority owned by private equity (PE) Abris Capital Partners, is still underway and expected to close later in the year. Koral is the remaining asset left in the PE-backed Graal group after the sale of the company’s canned fish and ready meal assets to German food giant Unternehmensgruppe Theo Muller earlier in 2023, a deal first reported by Undercurrent.

It’s thought this deal is on track, but the aim is to close later in the year.

The Koral plant, which produces fresh, smoked and marinated salmon and whitefish under brands like Super Fish as well as private label, is 22,000 square meters in size.

According to the Graal website, the plant in Kukinia, in the northeast of Poland, has 23 production lines for fresh, cold and hot smoked and marinated fish. The company can process 100t of raw material daily, with salmon and trout, halibut, seabass and tuna as its main species.

As well as smoked products, Koral can produce fresh fish in skin packs and modified atmosphere packaging. Over 500 are employed in the plant, the website states.

Antarctica Advisors is also running the sale process for Koral, having also worked on the sale of Graal’s canned fish and ready-meal assets to Muller.

Captain Fresh has hired Spanish executive Basola Valles to lead the European business as part of his expansion plan. Valles, who worked on Amazon’s European launch and has held top positions with other corporates, has since hired Luz Benitez Povedano as senior commercial director for the EU.

Povedano, who previously worked for France Telecom, Groupon, and JustEat Takeaway, joined the team in

 

SOURCE: Undercurrent News

It’s not only the rate of M&A’s that has slowed in seafood but the shape and structure of deals too.

M&A deals in the seafood industry are being reshaped by current economic factors that are impacting both the rate of dealmaking and how deals are structured.

The rate of M&As in the seafood industry is expected to be hindered by the difficulties in raising financing, said John Doucette, executive vice president and head of commercial lending for US-based M&T Bank.

“I think it’s going to be at a lesser pace just given the cost of money now,” Doucette told IntraFish.

A recent IntraFish report forecasted the number of global seafood M&A’s this year is likely to fall short of 2022 levels.

While international companies have been showing interest in moving in on US acquisitions, particularly in the then-northeast corner of the United States where the seafood industry is more fragmented, Doucette said commercial interest rates play much more into executives’ thinking.

“It’s just tough with the prime rate at 8.5 percent, and although (the US Federal Reserve) didn’t raise it the other day they certainly didn’t give any indication that they are going to reduce rates anytime soon either. It’s going to rely on more self-financing too,”

Must have?

The higher cost of capital is also making buyers more cautious, leading to the postponement of deals considered less strategic, Ignacio Kleiman, managing partner at investment banking firm Antarctica Advisors said.

Acquisitions generally fall into two categories “must have” and “nice to have,” Kleiman said.

“If you are presented with a have-to-have transaction, you are going to find a way to do it. If you are presented with anice-to-have transaction, you may do it or you may decide to postpone it a bit.”

While there is still a good volume of M&A activity, in part helped by pent-up demand left over from the COVID-19 pandemic, deals that are going ahead are seeing a greater use of earnouts and seller financing arrangements.

Earnouts are a pricing structure in which the sellers must “earn” part of the purchase price based on the performance of the business following the acquisition.

Seller financing is an arrangement in which the seller handles the mortgage process instead of a financial institution. Instead of applying for a conventional bank mortgage, the buyer signs a mortgage with the seller.

“Transactions are getting done. I think that buyers are being a little bit more disciplined on how they put the transactions together and what transactions are getting done because the cost of capital is forcing them to pursue transactions that have a fairly higher level of synergies in order to recoup some of that more expensive capital that they are using,” said Kleiman, who spoke on the changing nature of the seafood industry at a recent seafood industry forum in New Bedford, Massachusetts.

The event, which drew 60 seafood business leaders, was organized by M&T Bank, which operates over 1,000 branches in 12 US states, and accounting firm Citrin Cooperman, with the support of investment banking group Antarctica Advisors.

The forum was targeted at key seafood players in the New Bedford and the wider New England community to exchange ideas on current events affecting the sector. It’s hoped the forum might become an annual or biannual event.

Be creative

Where previously companies may have worked with a commercial bank and ended up signing a single check to make an acquisition, these days buyers and sellers need to be a bit more creative in how a deal is structured.

Companies may opt not to sell all of their shares in the business, retaining a minority and rolling over some of their equity, exiting perhaps three to five years later.

“It requires a little bit more creativity with buyers, a little more flexibility on both the seller and the buyer side.”

“Today, more than ever, you need an investment banker to help those transactions happening,” Kleiman said.

The northeast corner of the United States with its proliferation of $100 million to $400 million (€93 million €372million) seafood companies is proving attractive to those on the lookout for acquisitions including overseas investors, offering them more manageable deal sizes and boosting the likelihood of consolidation, Kleiman said.

“In terms of international players, I think the Europeans are a little more aggressive than the Asians, that’s why you see more movement on the east coast,” Kleiman said.

On the West Coast there are few processors, and in the Alaska-Seattle corner of northwest United States companies are frequently very large or very small, with little in between, he noted.

Even in the most challenging times, deals can be done, however, said Kleiman.

Despite the difficulties presented by COVID lockdowns, Antarctic Advisors still managed to close its biggest-ever deal in January 2021 when Premium Brands Holdings and a coalition of Mi’kmaq First Nations completed the acquisition of Canadian shellfish harvesting and processing giant Clearwater Seafood.

For Premium Brands the acquisition was a must-have deal. “Everyone decided to chug along,” Kleiman said.

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Source: Intrafish