Faroese fish farming company Bakkafrost has agreed to buy a 68.6% stake in The Scottish Salmon Company (SSC) from Northern Link Ltd and will bid for the remaining SSC shares.
The planned deal values The Scottish Salmon Company at £517 million.
Both companies are listed on the Oslo Stock Exchange, a unit of Euronext.
To fund the purchase, Bakkafrost plans to sell 7.33 million new shares to investors, which, if sold at Wednesday’s closing price, would raise $428 million.
“The successful acquisition of the 68.6% majority stake will trigger a mandatory tender offer for the remaining 31.4% free float in SSC, resulting in SSC being wholly acquired by Bakkafrost for a total consideration of £517 million,” said SSC.
“Such transaction will complete the strategic review initiated by SSC’s board of directors.
“The board, acting in the interests of all the stakeholders in the business, looks forward to working with Bakkafrost to establish its plans for the enlarged business.”
Edinburgh-based Scottish Salmon Company has most of its operations on the West Coast of Scotland and the Hebrides.
SSC has exclusive genetics to Native Hebridean Salmon and had a harvest of 29,913 tonnes in 2018, an 18,463 tonnes harvest in the first half of 2019 — and has total harvest capacity of 50,000 tonnes.
SSC generated EBITDA of £56.7 million in 2018 and £35.7 million in the first half of 2019.
Scottish Salmon Company CEO Craig Anderson said: “The board of SSC considers this offer to be in the best interest of all shareholders as it realises the material value that has been created after nine successive quarters of growth.
“The board initiated the independent Strategic Review in order to assess options to realise value and deliver future growth from the business.
“The review has been successful in terms of the volume and quality of the companies that have participated in the process, and has resulted in this acquisition to create a major global salmon farming business.
“I’m proud of the way the SSC team has conducted itself under my tenure, and they have all contributed to building a highly successful business that has ultimately become a compelling investment opportunity for Bakkafrost.
“The management team will now work closely with the new owners of the business to understand its strategic vision and implications for all SSC stakeholders.”
DC Advisory is acting as financial advisor to SSC in relation to the strategic review and Aabø-Evensen & Co Advokatfirma AS and CMS are acting as legal advisors to SSC.
DNB Markets, Goldman Sachs International and Nordea were appointed to lead the share issue, Bakkafrost said.