CAPE TOWN: Sea Harvest Group Limited (“Sea Harvest“/the “Company”/the “Group”) has communicated its firm intention to acquire 100% of Terrasan Group Limited’s (“Terrasan”) subsidiaries engaged in the catching, processing, and sale of pelagic fish, and 63.07% of Terrasan’s subsidiaries engaged in the farming, processing and sale of abalone for an initial amount of R965 million to be settled in shares and cash.
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. Employing more than 600 people, the business operates a fishing fleet that catches sardines and anchovies (under its 15-year fishing rights recently renewed in the 2020/21 Fishing Rights Application Process) and produces fish oil and fish meal (both largely for export), and canned fish (largely for the South African market and sold under the 118-year-old “Saldanha” brand). In addition to the fishing business, Sea Harvest will also acquire a majority stake in Terrasan’s 30-year-old, vertically integrated abalone business, Aqunion, one of South Africa’s leading abalone businesses based in Hermanus and Gansbaai. Employing 430 people, Aqunion produces and sells dried, canned and live abalone to a diversified customer base across the Far East.
“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,” said Sea Harvest Group CEO, Felix Ratheb. “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.”
Terrasan Group CEO Danie du Toit commented that 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.
Sea Harvest Group Non-Executive Chairman, Fred Roberston noted, “Central to our values as a company, the proposed transaction will benefit Terrasan employees by securing jobs and generating value for the beneficiaries of the Saldanha Foods Employee Trust and the local communities of Saldanha, St. Helena Bay, Gansbaai, Buffeljags, Kleinzee and Hermanus.”
The initial purchase amount of R965 million for the transaction will be settled through R600 million in Sea Harvest shares and the balance in cash, together with two further performance linked earnout amounts.
Alluding to the portion of the purchase consideration that will be discharged by way of the issue of Sea Harvest shares to Terrasan, Terrasan Chairman Stanley Subramoney says “This will yield several positive outcomes for Terrasan, its shareholders and other stakeholders, including that it will retain its exposure to the fishing and aquaculture industries by merging into the larger, combined and more diversified post-transaction business of Sea Harvest.”
The transaction is subject to regulatory approvals, the approval of Sea Harvest and Terrasan shareholders, and conditions normal for a transaction of this nature.
NOTES FOR THE EDITOR:
About the Sea Harvest Group
– Sea Harvest Group was founded in 1964 and is a vertically integrated, majority black owned, responsible fishing and food company that is listed on the Johannesburg Stock exchange in South Africa.
– The Group is a leading producer of premium seafood products, as well as dairy and other food products and markets its products to more than 30 countries globally.
– It employs c. 6000 staff and has operations in South Africa and Australia.
– It owns and operates c. 50 vessels, five fish processing facilities and two abalone farms. Its primary fish species are hake, horse mackerel, prawns and abalone.
– Sea Harvest supports an ecosystem approach to fisheries (EAF) management in its wild-capture operations. Its Cape hake products and Australian Shark Bay prawns and Exmouth prawns proudly bear the blue Marine Stewardship Council (MSC) logo – the gold standard for sustainability in the global fishing industry.
– In 2009, Sea Harvest and other commercial fishing companies, together with the World Wildlife Fund South Africa and BirdLife South Africa, formed the Responsible Fisheries Alliance (RFA) to initiate and fund projects that promote an EAF, thus ensuring that all facets of the marine eco-system are considered during the fishing process.
About the Terrasan
– Terrasan is a South African investment group that holds investments in the pelagic fishing, mariculture, aquaculture and property industries.
– It was incorporated in 1963 to create wealth for all its stakeholders by adding value to Southern Africa’s natural resources as well as participating in sustainable development projects by investing in productive assets.
– Terrasan subscribes to the vision that a sustainable business manages its activities and products responsibly to ensure a positive impact on society, the economy and a sustainable future.