The announced sale of Iceland Seafood UK (IS UK) to Espersen has been completed. The last outstanding issues when the acquisition was announced at the end of August have been resolved and Iceland Seafood International (ISI) confirmed yesterday in a statement that the Danish value-added producer is now the owner of 100% of the share capital of IS UK.
At the end of August, ISI announced that "after four challenging years" in the UK, the company had decided to divest the IS UK business "with a substantial loss." Now that the transaction has been completed, the Icelandic company said it has converted intercompany loans into equity and injected more equity to compensate for the negative equity balance and operating losses in the third quarter.
"After the equity injection, the book value of equity at completion will amount to £0.3m [€0,34m / $0,36m]," ISI stated. "According to the agreement, the sales price for the 100% share is £1,000 [€1,156 – $1,219] meaning that the sales loss of the shares will be £0.3m. Completion accounts will be prepared based on September interim accounts and a completion adjustment will be made in October, based on these accounts."
"The negative impact on ISI P&L and equity during 2023 is estimated £15.5m including transaction costs," it continued. According to the information provided, this figure includes negative operational results in the first 8 months of the year of £6.6 [€7.6m – $8m], impairment of fixed assets of £7.1m [€8.2m – $8.6m], £1.3m [€1.5m – $1.6m] of inventory write-offs, estimated transaction costs of £0.2m [€0.23m – $0.24m] and sales loss of share capital of £0.3m [€0,34m / $0,36m].
At the time the sale of the business to Espersen was made public, ISI's CEO said the company was confident that selling was the right decision for Iceland Seafood as a business. "This investment has been a great cost for the company and its shareholders. It's been a very tough market during these years, and we have tried with immense effort to turn this around without success," added Bjarni Ármannsson who, as of November 1, will hand over his position at the helm of Iceland Seafood International to Ægir Páll Friðbertsson.
In that announcement, Ármannsson also said he was confident that the interests of IS UK employees and customers would be well served within Espersen and wished them all the best in the UK market. "I believe they can use the assets better than we have been able due to their strong position in the UK value-added seafood market," he concluded.
In addition to factories in Europe and Asia, the Danish value-added producer has a significant share of its sales in the UK retail market, so this acquisition materializes Espersen's strategic intention to establish itself in what is its main market and one of Europe's leading seafood markets.
"This acquisition is more than just a business decision; it is a commitment to our customers, our employees, and the industry," said Espersen's CEO, Klaus B. Nielsen when the news became public. "We believe that our new UK facility and its leadership team will play a critical role in shaping Espersen's future on the UK market, allowing us to serve our customers better and fortify our position as a local supplier," he continued.
"With the solid foundation of Iceland Seafood UK Ltd. being integrated into our family, we are optimally positioned to tackle the evolving demands of the fish industry in the UK market. The coming year promises to be one of growth and fortified partnerships," he added. Now it is time for the Danish company and former IS UK's local management team to carry out the smooth integration they referred to when announcing the acquisition.
Iceland Seafood International is one of the largest exporters of fish products from Iceland. Founded in 1932, the company is an industry-leading supplier of North Atlantic seafood and a leading service provider in its markets. Headquartered in the island nation, it operates three divisions with businesses in Europe and North and South America. Its global network includes twelve businesses in seven country locations.
For its part, Espersen is a world leader in the production of frozen fish blocks, frozen fillets, specialty cuts, and luxury breaded and flaked fish products. Most of its products are custom-made private labels; however, it also has its own locally branded products. With production plants in Denmark, Lithuania, Poland, Vietnam, and now also the United Kingdom, it also has representative offices in France, Germany, Sweden, and Denmark.
