Faroese buyer

Scottish Salmon Company sold to Bakkafrost in £516m deal

Scottish Salmon Company

Firm is one of the biggest producers of fish

The Scottish Salmon Company, one of the country’s biggest producers of farmed fish, has been acquired by a firm in the Faroe Islands in a £516m deal.

Bakkafrost will take a 69% shareholding in the Edinburgh-based company from the current majority owner, the private equity firm Northern Link, a fund said to be backed by a Ukrainian investor.

The stake is valued at £356m and the offer will trigger a mandatory offer for the remaining equity.

The Scottish Salmon Company, which will be delisted from the Oslo Stock Exchange operates from 60 sites and has more than 600 employees. Management announced a review of its prospects in April and in July said it was considering a sale of the business.

The company is the second-largest salmon farming firm by harvest volume in Scotland, producing 29,913 metric tons (MT) of salmon in 2018 and 18,463 MT of salmon in the first half of 2019.

Scottish Salmon company has become a compelling investment opportunity for Bakkafrost

– Craig Anderson

It owns exclusive genetic rights to grow Native Hebridean Salmon, which it claims is “stronger, leaner, and noticeably firmer” than Atlantic salmon. It has a total harvest capacity of 50,000 MT. It reported net operating revenues of £111.8 million for the first half of this year, against £98.m in the corresponding period of 2018.

Bakkafrost’s purchase price represents a 7.2x multiple of SSC’s earnings before interest, tax, depreciation and amortisation (EBITDA), according to SSC CEO Craig Anderson.

“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,” he said.

“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.

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