Reykjavik-headquartered Iceland Seafood International (ISI) has announced the purchase of Oceanpath Ltd, the largest producer of fresh fish and a major frozen seafood packer in Ireland. The deal, the first since ISI’s listing on the Nasdaq Stock Market, marks a significant step in its strategy of delivering strong organic growth combined with strategic acquisitions of first-rate seafood companies into the group.
Iceland Seafood International has agreed to purchase 67% of Oceanpath Limited Group, with management retaining a 33% share. Oceanpath is the leading fresh fish company in Ireland, owning the iconic Dunn’s of Dublin brand, which has been operating since 1822.
ISI has now concluded the legal, financial and commercial due diligence process. This included discussions with key parties essential for the continuing operations of Oceanpath, which was successfully finalized on March 13. Completion of the transaction is expected to take place later this month, once the parties conclude definitive share purchase and shareholders agreements, and the relevant conditions are fulfilled.
The acquired company operates two factories: the Oceanpath plant, which sources, processes and sells fresh and frozen seafood; and Dunn’s of Dublin, a premium retail brand best known for its smoked salmon products.
The company has shown solid growth and profitability in recent years. Expectations for revenues in the current financial year (ending April 30) are €33-35 million, generating normalized profit before tax of €1.8-€2.2 million – up from €30.9 million revenue and €1.4 million profit before tax achieved the year previous for the period ending April 2017.
Oceanpath is currently owned by the Ecock family. Alan Ecock is the largest shareholder and will continue as managing director of the business, while his sons, Ken and Trevor, will continue to be employed as commercial and production directors respectively.
According to the agreement the purchase price for the 67% stake in Oceanpath will be in the range from €12.4 million to €13.4 million on a debt and cash free basis. The final price will be subject to actual profitability of Oceanpath for the current financial year and the following 12 months until April 30, 2019. Of the purchase price, €7.4 million will be paid at completion, with further payments due by August 2018 and August 2019. The acquisition will be financed from cash, although a €5 million long-term loan may be concluded in conjunction with the cash offering.
