Sea Harvest Group Limited has published that it will acquire 100% of Terrasan Group Limited’s (Terrasan) subsidiaries engaged in the catching, processing, and sale of pelagic fish. Also, they plan to acquire 63.07% of Terrasan's subsidiaries focused on farming, processing, and selling abalone.
The initial cost for this acquisition is set at R965 million, to be paid in both shares and cash. Sea Harvest will pay R600 million using its shares, and the rest will be in cash. There are also two additional payments linked to performance.
As a part of the transaction, Sea Harvest will acquire Terrasan’s vertically integrated pelagic fish business, West Point Fishing, which is based in St. Helena Bay on the West Coast of South Africa. The business consists of operating a fishing fleet that catches sardines and anchovies and produces fish oil fish meal and canned fish.
Regarding the abalone business, Aqunion is one of South Africa’s leading abalone businesses based in Hermanus and Gansbaai. It produces and sells dried, canned, and live abalone to a diversified customer base across the Far East.
Sea Harvest Group CEO, Felix Ratheb, said: "We are confident that the acquisition will create value and diversification into wild-caught pelagic species and their processed products, including fish oil, fish meal, and canned fish."
"Furthermore, it will enable us to add value and scale to our own small sardine and anchovy pelagic quota where we currently have a small footprint; add a 118-year-old brand to the Group thereby complementing our 60-year-old hake brand; counter the cyclicality of the pelagic fishery relative to the hake fishery and add a mature, cash generative abalone business with a diversified customer base and markets to our existing abalone operations," he added.
Finally, Terrasan Group CEO Danie du Toit commented: "Terrasan and Sea Harvest believe that a combined South African abalone business will benefit from scale and synergies created through the consolidation, leaving it well positioned as a South African champion to exploit international opportunities and successfully compete in its target markets."