Ignacio Kleiman warned that Latin America’s seafood industry is facing “unprecedented uncertainty” because political upheaval in Argentina, Chile, Peru and Ecuador has spurred companies with strong finances to look overseas, meaning domestic investment will slow and only sporadic strategic deals are likely
Ignacio Kleiman told Undercurrent that a “perfect storm” of inflation‑driven cost increases, higher interest rates and reduced consumption will force seafood companies to recapitalize and merge, predicting more consolidation across upstream and downstream sectors as firms struggle to protect margins
September 26, 2023 – Antarctica Advisors LLC, the leading Seafood Industry-focused M&A advisory firm, acted as the exclusive investment banking advisor to Sea Fresh USA (“Sea Fresh”), one of the largest processors of fresh, premium-quality, wild-caught Loligo Squid in the U.S., in its sale to Oceano Seafood (“Oceano”), an international fishing and processing conglomerate from Lima, Peru.
Founded in 1981, Sea Fresh USA is a fully integrated seafood business with fishing, unloading, processing & packing operations. Sea Fresh has docking operations in Galilee, RI (Handrigan Seafoods) and a BRC-certified processing facility in North Kingstown, RI. The company is well known for its fresh and frozen Squid products distributed through retail and food service.
James Fox, Owner of Sea Fresh, commented: “Oceano has been a customer of ours for several years and we are excited to be their first acquisition in the U.S. market. We are thankful to have worked with the Antarctica Advisors team who played a key role in helping us navigate this complex transaction process. Their senior banker M&A advice was critical to the structuring and negotiating the best possible transaction for me and my employees.”
Ignacio Tirado, President of Oceano Seafoods, shared: “It is an honor to continue Jim Fox’s legacy and to join the company’s experienced management. We aim to continue investing and growing the business in the U.S. and integrate it our global sourcing capabilities into it.”
Ignacio Kleiman, Managing Partner of Antarctica Advisors, pointed out: “Sea Fresh provides Oceano direct access to the U.S. market with a brand recognized for its high-quality fresh Squid products. We very much appreciated the opportunity to have worked with Sea Fresh’s team and look forward to watching the company’s continued growth.”
For Oceano, the acquisition of Sea Fresh expands its international footprint while deepening its supplier network and presents numerous synergies facilitating growth including diversifying its product offerings with access to the U.S. market.
Antarctica Advisors is the leading US-based, independent investment banking firm providing corporate clients in the global Seafood Industry with specialized M&A advisory, private equity and debt capital raising services. The firm’s highly specialized Seafood Team is comprised of professionals with significant knowledge of the Seafood Industry, as well as a proven track record of successful transaction execution.
Antarctica Advisors LLC is a licensed broker-dealer, member of FINRA and SIPC.
For further information contact Ignacio Kleiman, Antarctica Advisors LLC at:
IKleiman@AntarcticaLLC.com or visit www.AntarcticaLLC.com
Peru’s Oceano Corp. purchased Rhode Island‑based squid processor Sea Fresh USA, adding an MSC‑certified squid operation and lifting Oceano’s turnover to about US$425 million, though U.S. rules mean the buyer can own only 25 % of the vessels
June 13, 2023 – Antarctica Advisors LLC, the leading Seafood Industry-focused M&A advisory firm, acted as the exclusive investment banking advisor to Boston Sword & Tuna, Inc. (“Boston Sword”), one of the largest distributors of fresh, premium-quality, wild-caught and farm raised seafood in North America, in its sale to Fortune International, LLC (“Fortune”), one of the largest seafood and specialty food distributors in the United States.
Based in the heart of Boston’s Seaport District, Boston Sword was established in 2003 by the Scola Family. Michael Scola, CEO of Boston Sword, will continue to run the company along with Co-Owner and President Larry Dore. With the backing of Fortune and capacity added through a recent 9,000 sq. ft. expansion of its processing plant, Boston Sword will take its already sizable skin-pack business national and significantly grow its other lines of business.
At the 2023 Seafood Expo North America, Undercurrent reported a “tidal wave” of M&A announcements, with six major deals—including Fortune International’s purchase of Boston Sword & Tuna adding almost US$300 million in sales—reflecting pent‑up activity after 2022 and showing that cheap capital and succession planning are fueling consolidation
The U.S. Federal Reserve raising interest rates has caused banks to pull back on financing, and that means merger and acquisition activity will slow in the coming quarters, according to a panel of financial experts, speaking during Seafood Expo North America.
The panel, on 14 March at SENA in Boston, Massachusetts, agreed higher interest rates and an uncertain economic situation will lead banks to be much more selective about lending than they were during the post-Covid recovery period when financing was cheap. However, Jason Brantly, a senior vice president and senior relationship manager at Bank of America, said banks will still want to help make deals if the numbers make sense.
“The pendulum has definitely swung from really aggressive lending and obviously cheaper lending rates, but banks are still eager to lend,” Brantly said.
The failure of Silicon Valley Bank on 10 March, and the subsequent failure of Signature Bank, were two of the three largest bank failures in U.S. history, but a lot of the money that was taken out of those banks didn’t just disappear, and Brantly said both Bank of America and fellow panel member John Doucette’sinstitution – M&T Bank – are likely going to see large deposits in the near future as people look for more-stable institutions. That means banks will have more money to reinvest in customers.
However, signs are pointing to banks paring back the amount of lending they do. The leverage B loan market pulled back in January and February as banks decided against loans with slightly higher risk, Brantly said.
“2022 was one of the lowest years in more than a decade, and we’re well below that pace,” he said. “I think what’s happened in the bank market in the last week will probably continue to make it where there is not going to be a lot of folks wanting to go to that market and access capital.”
A court decision finding fishing permits are a revocable privilege, rather than a compensable property, will also impact valuations for seafood companies with wild-catch operations. Depending on how the ruling gets interpreted, that may make it more difficult for companies with fishing vessels to access financing.
“If that becomes a precedent, that will have a substantial impact for those kinds of companies and their ability to access capital markets,” Brantly said. “We depend on that quota as collateral.”
More-expensive financing, coupled with an increasing reluctance from banks to lend to businesses, doesn’t mean merger-and-acquisition activity is off the table – as evidenced by the announcement that Cooke was acquiring Slade Gorton just hours after the panel took place.
“I think the appetite is still there. We’re certainly still interested in lending,” Brantly said.
Doucette said for many transactions requiring large amounts of financing, senior lending institutions aren’t the way to go.
“It’s very easy when rates are low to sit back and say, ‘Get everything you can out of that senior lender,’” he said. “But that term B stuff has just gone away, so now it’s time for the private-equity folks, the family offices. We’ve seen a lot of international activity in the [U.S.] Northeast coming in.”
Term A loans are amortized evenly over five to seven years, while term B loans have nominal amortization over the first five to eight years of the loan and then a large payment in the final year, making it less costly for the company getting the loan, but riskier for the bank in the long run.
Brantly said term B acquisitions are more difficult, but a creative business deal can still be struck – it just takes work and sound advice from advisors. The community development groups in Alaska that partnered with Maruha Nichiro to purchase nine pollock vessels, he said, are one example of groups coming together to make creative deals with unique structures that still accomplish merger and acquisition goals.
Softness creeping into the global economy will also more than likely force some businesses that fall into difficulty to pursue a sale.
“That’s what it’s going to take, is more folks either going together splitting up the deal, or coming together to hold assets in that kind of creative way,” Brantlysaid.
Antarctica Advisors Managing Partner Ignacio Kleiman said that those companies in tight spots should not wait to get in touch with an advisor if the predicted recession makes things difficult for them.
“Don’t wait to call somebody,” he said. “We have worked with many companies in the sector that went through financial difficulties. The smartest ones, they realize it right away, and they would call us or some other advisor.”
Getting ahead of liquidity problems early, and getting in touch with commercial banks early, can help stave off a bigger problem down the road.
“The main thing they are looking for is, do you have a plan?” Kleiman said. “They don’t want to take over your company. They don’t want to liquidate you. They like their clients, and we have done a number of transactions where we work collaboratively. But they want to see that you’re taking your situation seriously.”
Photo by Chris Chase/SeafoodSource
Ignacio Kleiman said Cooke’s sale of Icicle Seafoods’ whitefish assets—including nine vessels and about 4 % of the Bering Sea pollock quota—to a partnership of Maruha Nichiro and two Community Development Quota groups will allow Cooke to focus on higher‑value species while giving the buyers greater volume despite foreign‑ownership restrictions
Maruha Nichiro and Alaska Community Development Quota groups confirmed they acquired Icicle Seafoods’ whitefish assets—including the Northern Victor processing plant, nine vessels and roughly 4 % of the Bering Sea pollock quota—for an estimated US$180–200 million in a structure designed to meet U.S. ownership rules
Despite another year of the COVID-19 pandemic, investor interest in the seafood sector was still strong in 2021. A tally of IntraFish coverage shows at least 65 notable mergers, acquisitions or significant investments occurred last year.
That’s compared with the roughly 75 deals that occurred in 2019, pre-pandemic, and the nearly 60 that took place in 2020.
Inevitably, the activity was slightly slower than in pre-pandemic times, as travel bans remained in place for much of the year.
As Ignacio Kleiman, a principal at seafood M&A advisory Antarctica Advisors, put it in an interview with IntraFish earlier last year: “It is very difficult to make a large investment decision if you are not able to thoroughly kick the tires in person.”
But 2021 saw a lot of pent-up demand carry over from 2020, and while COVID — particularly the new omicron variant — hangs over the world, activity and travel will inevitably pick up again, with some expecting a return to “normal” in the first half of this year.
Of all the segments, farmed salmon showed perhaps the most interesting M&A trajectory, with the long-running “will they, won’t they?” purchase of Australia’s Huon Aquaculture by Brazilian meat giant JBS; Grieg’s move out of the UK with its sale to Scottish Sea Farms; and NTS’s purchase of Norway Royal Salmon, a deal that creates the world’s sixth-largest salmon producer.
In whitefish, too, the scent of money was strong. During the year, Russian catching giant Norebo was involved in a string of acquisitions, reflecting rocketing investments in both the public and private sectors into the country’s seafood industry.
In Central America, shrimp farmer Martec bought Costa Rican producer Rainforest Tilapia from AquaChile.
And in the fisheries and processing segment there were deals galore. Alaska’s wild salmon industry, for example, saw consolidation of the sector continue.
Just weeks before the start of Bristol Bay fishing season, Canada-based Canfisco swept in and bought up fellow major processor Marubeni-owned North Pacific Seafoods. It followed Canfisco’s earlier purchase of the assets of Bristol Bay salmon processor Deep Sea Fisheries and a string of major mergers the year prior.
Canada also led big buck action in 2021 when Premium Brands, along with the Mi’kmaq First Nation, completed a $769 million takeover of Canadian seafood giant Clearwater Seafood, and Sofina Foods reached a deal to acquire Young’s Seafood parent Eight Fifty, bringing the UK’s largest seafood company under Canadian ownership.
“A lot of deals were put on hold, or they slowed down, or they died, because of the inability to travel,” said Kleiman.
“I think that affected volume for 2021, and that’s why I think in 2022 the picture is going to be substantially different … I think 2022 will be a very active year.”
A week into the New Year and IntraFish has already reported on a string of M&A deals.
In the United States, seafood supplier Fortune International and foodservice giants Chef’s Warehouse and HF Foods Group made acquisitions in the sector.
Faroese salmon farmer Bakkafrost acquired Denmark-based Munkebo Seafood, and two interesting acquisitions from Thai Union Group and Russian giant Norebo indicate a change in how companies think about the supply chain.
Transaction SummaryAntarctica Advisors, the leading Seafood Industry-focused investment banking firm, acted as the exclusive financial advisor to Clear Springs Foods, Inc. in its 100% sale to Riverence Holding LLC. The combined group is the largest producer of trout in the U.S., becoming one of the largest aquaculture companies in the country.
Antarctica’s specialized Seafood Team worked with the Board and Management in finding the best strategy for the Company, advised in the Company’s refinancing prior to the sale, and led a closed competitive sales process geared towards maximizing value for the Company’s employee-owners.