Cooke Inc., the parent company of Cooke Aquaculture Inc. of New Brunswick, Canada, has acquired all outstanding shares of Tassal Group Limited of Australia for A$5.23 per share in cash by way of a scheme of arrangement. The transaction price represents a premium of 49% to Tassal's undisturbed closing share price on June 22, 2022.
To clarify, Tassal's salmon farms cover five marine zones. Four freshwater hatcheries and four processing facilities in Tasmania. While prawn farming, processing, and seafood processing are undertaken in New South Wales and Queensland.
Regarding the acquisition, Glenn Cooke, CEO of Cooke said: "Tassal is an excellent fit with Cooke. As we see many similarities between our two companies. Our people and communities are very comparable as well, with agriculture, fisheries, aquaculture, and forestry prominently supporting export-driven economies."
Also, he highlighted the important role of Tassal in Tasmania: "Our family-owned company is keen to have the opportunity to continue to grow Tassal. From the strong base the employees, management, and board have created".
"We intend to make strategic investments in engineering, science, and technology to further enhance Tassal's capabilities. In addition to growing their sales reach through leveraging our worldwide seafood distribution channels," he added.
Finally, Mark Ryan, Managing Director and CEO of Tassal, explained: "Combining our two companies' people-first cultures and our shared passion for producing top quality seafood, is a natural fit. A future acquisition by Cooke enables Tassal to fast-track our goal to be one of the world's most transparent and sustainable protein producers."
The above price represents a premium of 49% to the undisturbed closing price of Tassal shares on 22 June 2022 of A$3.52. Besides, a premium of 47% to the volume-weighted average price of Tassal shares for the 30 days to and including 22 June 2022 of A$3.55; and a premium of 46% to the volume-weighted average price of Tassal shares for the 90 days to and including 22 June 2022 of A$3.59.
Furthermore, an implied acquisition EV/EBITDA multiple of approximately 10.0x Tassal's FY22 EBITDA. On the other hand, the Scheme is subject to the approval of Tassal shareholders, Court approval, and other customary closing conditions.
Cooke has confirmed Kidder Williams, an Australian investment bank, is acting as buy-side financial adviser. Secondly, Australian law firm Allens is acting as legal counsel for Cooke.
At 115,000 metric tonnes annually, Cooke is the sixth largest farmed salmon producer in the world. All Cooke feed mills, hatcheries, farms, and processing operations are accredited by third-party organizations. The Tassal acquisition would put Cooke at 155,000 metric tonnes — closing in on becoming a top five producer.
Tassal is the largest vertically integrated seafood producer and blue agri-tech business in Australia. With over 36 years of experience, Tassal employs over 1,700 people in Tasmania and Australia who farmed 40,000 metric tonnes of Atlantic salmon and 5,500 metric tonnes of Black Tiger Prawn in 2021 for domestic and export markets including Asia, New Zealand, and the USA.
The company distributes salmon and prawns through its De Costi Seafood business in Lidcombe, New South Wales, Australia. It also sources and processes a wide range of seafood. Salmon is offered as fresh deli-grade, fresh packaged, and smoked for supermarkets. Prawns are distributed through supermarkets, delicatessens, and fish markets under the Tropic Co trademark.