More than 75 seafood mergers and acquisitions were reported last year by IntraFish.

Top investment advisors in the seafood sector are optimistic about a rise in M&A activity in 2025 following a strong 2024.

More than 75 seafood mergers and acquisitions were reported last year by IntraFish, from strategic investments and acquisitions of significant minority stakes to full-blown, billion-dollar takeovers.

Jorgen Horntvedt, partner at Seafood Corporate Advisors, a Norway-based Seafood M&A and strategy firm, expects 2025 to be a busy year for M&A in the seafood space, in part because the underlying market for closing deals is good, he said.

Stock markets and debt markets are currently strong, aspects which lead companies to want to strengthen their operations and scale via M&A, he said.

Sectors likely to experience M&A activity in the coming year include tech-related companies, with buyers in this space typically being venture capital firms, private equity firms and family offices

“The tech sector will continue to grow as salmon farmers continue to benefit from tech advancements,” Horntvedt said.

Feed ingredients, which are strategically important for the industry as a whole, are expected to drive many smaller transactions to scale, he said.

There could also be significant deals between salmon farmers during the year, as these groups want to take advantage of economies of scale, Horntvedt said. Processors also benefit from scale and deals could be seen between them.

Smaller bolt-on deals will also feature high during the year, and M&A here could include salmon farmers looking for companies downstream and those that can supply raw material.

Uncertain times

However, while global stock markets generally are strong, times are currently also unpredictable.

“The seafood sector is resilient and generally does well when markets are more uncertain,” Horntvedt said.

From a US perspective, the improved outlook comes after a strong year of gains in the investment market and with presidential elections now done and dusted, Ignacio Kleiman, managing partner at investment banking firm Antarctica Advisors.

Kleiman said 2024 was a good year for his firm. Since the end of 2023, among others, Antarctica Advisors has advised on Indian supply chain platform Captain Fresh’s acquisition of Polish smoked salmon processor Koral, German food giant Unternehmensgruppe and Theo Muller (UTM)’s move to acquire Polish seafood company Graal Group.

One potential stumbling block, particularly in the United States, Kleiman said, could be the imposition of tariffs by the second Trump administration.

“With regards to the seafood industry, I think one of the questions in the United States, in general, is whether the industry is going to be hit by tariffs,” Kleiman told IntraFish.

Donald Trump, who won November’s US presidential election by defeating Democratic Vice President Kamala Harris, has threatened to impose tariffs of at least 60 percent on Chinese goods, as well as 10 to 20 percent on products from other countries.

Such a move would be unlikely to find much support among US industrial seafood buyers and household consumers, who end up footing the bill.

“It must be remembered that 90 percent or so of fish consumption in the United States is imported,” Kleiman said.

While Kleiman said it is currently unclear how the tariff situation will play out, he thinks that if the economy continues as expected and interest rates continue to fall this will help reduce companies’ financial costs and also make M transactions more attractive.

The investment expert said the cost-inefficient seafood industry characterized by many mid-sized and small players would benefit from consolidation between competitors.

“If you manage to control your costs better and maybe even reduce your prices, then the food is a much more competitive protein and that is going to be good for the sector in general, for the industry in general,” Kleiman said.

A great mix of transactions in 2024 showed opportunities in different places and sectors in the fish economy, he noted.

“I think this year I would expect more consolidation in processing and distribution,” he said.

Looking at the wider picture, leading investment firms Barclays, Boston, Morg Stanley and KPMG are largely upbeat about prospects for a revival in mergers and acquisitions in their outlooks, thanks in part to what they expect will be falling interest rates and a more relaxed regulatory climate.

 

SOURCE: IntraFish

 

Global economic upheaval has not put a dampener on seafood industry consolidation this year.

The seafood processing, aquaculture, fisheries and aquatech sectors have shown a surprising amount of merger and acquisition (M&A) activity so far in 2024, reflecting both investor enthusiasm and the ongoing need for consolidation.

Deals slowed in 2023 from the year prior. An IntraFish tally showed 77 acquisitions, mergers and significant investment stakes in 2023 — a 7 percent decline over 2022. However, based on the pace so far in 2024, it is conceivable that this year will reach that level, if not higher.

IntraFish on reported over 60 mergers, acquisitions or substantial stake sales through the first nine months of the year.

Ignacio Kleiman, principal at Antarctica Advisors, a boutique seafood advisory group, told IntraFish that this year shows the appetite for some industry players to continue much-needed consolidation on the processing and distribution side in particular.

“It’s been a year of consolidation,” he said. “It’s been a year with larger deals that were more prominent, as opposed to a whole bunch of small deals last year.”

Kleiman noted that some of the larger players with “more imagination” took advantage of supply chain inefficiencies. Japanese giants were among the deal-makers this year, as were Canadian group Cooke, Norwegian firms SalMar, Nergard and Pelagia, and biopharma behemoth MSD.

Kleiman said the recent rate cut by the US Federal Reserve, though it may not have an immediate impact, is building confidence among owners that may have been reluctant to start discussions.

The fourth quarter is also a notorious period for inking deals, so it’s inevitable that the industry will see more come through, according to Kleiman. Though he expects to see consolidation in processing and distribution in particular, the fragmentation across the industry means there are many more deals to come across the entire value chain.

“There has to be more integration and more consolidation…just because that’s a way of capturing more margin and generating a substantial level of synergies,” Kleiman said.

One sector that should be more acquisitive than it has been, given its size and strength, is the Norwegian salmon farming sector, he said.

“They continue to do exactly the same thing they were doing 10 years ago, as opposed to looking for a way of diversifying into other species.”

Anne Hvistendahl, global head of seafood at DNB, the world’s largest lender to the seafood industry, said the Norwegian salmon industry has plenty of consolidation to tackle in its own backyard, with around 80 salmon farmers in Norway.

“Things will happen, and we have mandates in that direction,” Hvistendahl told IntraFish. “You have generational change, so over time there will be fewer players in Norway and in Chile.”
Both in Norway and across borders, the industry can expect to see more deals come to fruition in the salmon sector, but if owners are happy with their operations, it’s difficult to convince them to think about consolidation, Hvistendahl said.

Dag Sletmo, senior advisor for DNB Seafood, put it bluntly: “Everybody wants to buy, and nobody wants to sell.”

Listen to our full conversation with Kleiman on the most recent episode of the IntraFish Podcast, and follow us on Apple and Spotify to hear our upcoming\ conversation with Hvistendahl and Sletmo.

Listen the PODCAST here.

This year is set to be a better year partly amid improved stock market sentiment, financial executives told IntraFish.

The seafood industry could see more mergers and acquisitions in 2024, although deals may be smaller and driven by the technology and artificial intelligence sectors, according to those in the M&A business.

There were fewer M&A deals last year, despite the fact the seafood sector did not suffer as significant a fall as several other sectors.

Ignacio Kleiman, managing partner at investment banking firm Antarctica Advisors, said he expects 2024 to be a better year amid improved sentiment towards the stock market and an expectation of easing interest rates.

“I think that the outlook is positive. Last year was a little slower because we were digesting higher interest rates and some volatility in Ukraine and all of that. But I think all of that has been digested already. Besides that, there was volatility in different sectors of seafood, in shrimp, in salmon, in snow crab still, and lobster. It was a pretty difficult year in general.”

In spite of this, a number of transactions did happen. An IntraFish analysis shows 77 acquisitions and investments were completed during 2023, down more than 7 percent from 2022’s 83, but 18.5 percent higher than the reported 65 deals during 2021.

Antarctica itself closed the sale of Seafresh to Oceana of Peru and the Continental Grain Company (Conti), Organizacion Cultiba SAB de CV (Cultiba), Equity Group Investments (EGI), and Castle Harlan investment in Mexico-based tuna rancher Baja Aqua Farms, in addition to a number of unreported private deals.

“There is more stuff popping up. I think people have an expectation that eventually interest rates are going to startcoming down, inflation is coming down, earnings and profitability is stabilizing,” Kleiman said.

“The understanding and the expectation is that we are on the other side of this curve, and earnings and the cost ofmoney is and will continue to stabilize. I think that is favorable winds for a pick up in M&A activity, ” Kleiman said.

Given the trend for seafood industry consolidation and the drive for companies to become more efficient, deals of all sizes in different sectors and countries are likely in his view.

“Last year, people were pretty focused on improving their operations, so they were inwardly focused. This year, we are going back to a more normal environment where people are also looking for acquisition opportunities to grow.”

John Doucette, executive vice president and head of commercial lending for US-based M&T Bank, said he expects M&A levels to be similar to those of 2023.

“There is certainly M&A activity that is out there. I think that trend is still going to continue. Values might come down a bit given the interest rates.”

In a difficult climate, banks want to see steady cash flow and, where possible, upswings in this metric before lending, the executive said.

“You are going to see more private equity or family office [involvement]. There are going to be some mergers where there is not going to be as much cash.”

Doucette expects to see lower deal valuations, especially in the US Northeast where the industry is more fragmented.

Interest rate reductions expected to begin in mid-2024 could also help propel the number of M&As in Doucette’sview. “That’s certainly going to make it easier to digest,” he said.

Tech and equipment are sexy

Seafood Corporate Advisors Partner Jorgen Horntvedt said seafood M&A in 2024 will be all about technology and equipment, with tech providers really relevant in terms of decreasing environmental footprints and collecting utilizing data to enable more informed real-time decisions and improving efficiency.

“Utilizing byproducts will provide further consolidation opportunities for larger ingredient companies. Overall, the ongoing consolidation across the equipment supplier segment is expected to continue,” Horntvedt said.

For Hakon Berg, CEO at Norway-based investment group Skeie Teknologi, there is likely to be a fair amount of M&A activity across the digital seafood space in 2024 because of a growing need for data and precise measuring.

There is a significant number of these companies in the space and many of them are looking for cash, and as they become more mature businesses they are becoming more attractive targets, he added.

The prognosis is less clear for Norwegian salmon farmers, who were hit last year with a new 25 percent tax, known as the ground rent tax, on their sea-based farming operations.

“In Norway, the aquaculture tax could lower M&A volumes due to market uncertainty, but the market could also see a heightened focus on consolidation amongst farmers,” Berg said.

“I think we could see a growth in trade sales of smaller farmers due to the tax situation in Norway and the overall economies of scale in the industry.”

SOURCE: The Wave