Iceland Seafood International will issue 40 million new shares of its stock to help finance its acquisition of Madrid, Spain-based salmon smoker Ahumados Dominguez.
Reykjavik, Iceland-based ISI announced last week it will acquire an 85 percent stake in Ahumados Dominguez from the Mestanza family for EUR 12.44 million (USD 14.6 million), with the transaction closing 27 September, 2021.
The transaction will be financed through a combination of debt and equity, according to a 20 September press release. The issuance of new stock, at a price of ISK 17.10 (USD 0.13, EUR 0.11) per share – equal to its highest price on Friday, 17 September – is contingent upon the closing of the Ahumados Dominguez acquisition. Following the move, ISI will a total share capital approximately 2.7 billion shares.
“I’m pleased we are announcing the acquisition of Ahumados Dominguez. This is a very important part of our ambition to strengthen our position into Spanish retail and at the same time, entering the fast-growing salmon sector in Spain,” ISI CEO Bjarni Ármannsson said. “Ahumados Dominguez is an excellent addition to the current strong footprint in salmon that we have in the Irish salmon sector. Annually, the group will be producing high-quality salmon products from over 6,000 MT of raw material, predominantly for retail. We are confident that Ahumados Dominguez’s experienced management team and strong consumer brand position will create an excellent platform for future growth and welcome this new addition to the group.”
ISI first announced its intention to purchase Ahumados Dominguez via a letter of intent signed in May 2021. Ahumados Dominguez Managing Director Pedro Mestanza will continue to lead the company after the acquisition and will remain a minority owner, with a 15 percent stake and an option to buy an additional 5 percent stake from ISI within the next five years.
“It is an exciting step for Ahumados Dominguez to partner up with Iceland Seafood,” Mestanza said. “The group’s international expertise and experience when it comes to sourcing and marketing of seafood creates an opportunity to expand our range of high-quality products whilst maintaining the highest standards of service to our customers.”
Ahumados Dominguez has a “strong brand and consumer recognition in Spanish retail,” according to ISI, and its strong consumer campaigns and direct consumer-facing presence via specialty stores attracted ISI to the business, Ármannsson said.
“The Ahumados Dominquez brand is among the seven most-dominant brands in the smoked salmon sector within Spanish retail. The acquisition will strengthen Iceland Seafood’s proposition in the Spanish retail sector and it will create opportunities to utilize the strong platform of Ahumados Dominguez to sell high-quality cod products,” ISI said. “At the same time, Iceland Seafood will be entering the fast-growing retail market for salmon in Spain. Utilizing opportunities that Ahumados Dominguez has as a standalone company and new opportunities created with the acquisition, the aim is to significantly grow both sales and profitability in the coming years.”
In 2020, Ahumados Dominquez registered EUR 19.3 million (USD 22.6 million) in sales, and its earnings before interest, taxes, depreciation, and amortization (EBITDA) was EUR 1.7 million (USD 2 million).
Photo courtesy of Hipercor
