Ignacio Kleiman is the Managing Partner at Antarctica Advisors. Here he tells Finance Monthly about his firms role in Daybrook Fisheries’ acquisition by South Africa’s Oceana Group.
Your firm advised Oceana on their acquisition of Daybrook Fisheries, specifically what did Antarctica Advisors assist on during the acquisition?
The Seafood Team at Antarctica Advisors has had a long standing and trusting relationship with both Oceana Group and Daybrook Fisheries for many years. Through our relationship with the senior management at Oceana Group we were well aware of the company’s interest to seek strategic acquisitions in order to diversify geographically and vertically, gaining additional access to the valuable seafood resource. Additionally, we also have been aware that the shareholders of Daybrook were at a point where they were prepared to entertain confidential discussions around a potential transaction. Our M&A team originated the transaction, assisted in its structuring and negotiation on the US front and assisted Oceana Group in raising acquisition debt financing for the transaction in the US. We leveraged the well established relationships we have with commercial banks in the U.S. to structure a financing package that met Oceana’s needs for this transaction.
How was the deal structured? How long had Antarctica Advisors been working towards this acquisition with Oceana?
Due to U.S. restrictions in regards to foreign ownership of entities with fishing, we knew going into this transaction a unique structure would be needed. Together with the management of Oceana and Daybrook and the appropriate legal counsel, we were able to arrive at a structure in which Oceana acquired 100% of land-based assets and 25% of the fishing assets, with the former shareholders of Daybrook retained 75% of the fishing assets. This way the transaction satisfied the American Fisheries Act and the transaction was approved by the relevant regulatory agency, while also satisfying the needs and goals of both our client and the seller.
“We knew going into this transaction a unique structure would be needed”
What impact will this transaction have on the global seafood industry? Will more companies begin to consolidate?
This was a banner transaction in the global seafood industry (both strategically and financially), and a game-changer in the global fishmeal sector in particular. Furthermore the transaction is a meaningful step for Oceana Group towards becoming a global seafood company, diversifying from its current operations in southern Africa. We at Antarctica Advisors anticipate that this transaction will further increase the awareness from foreign investors interested in acquiring companies in the U.S. with direct access to the seafood resource. That, coupled with fragmentation in the US seafood industry, will definitely spur further consolidation and the Seafood Team at Antarctica is well positioned to play an important role in that process.
You act on behalf buyers and sellers in M&A deals, how is the process different for each party?
Antarctica’s role is that of a “trusted advisor”, and each process we are involved in is tailor-made to the specific situation. When we work with owners looking to sell their companies, we spend a good amount of time getting to know the business in order to understand fully the drivers that will enhance the valuation of the business. Throughout the process we develop a close relationship with the owners and senior management and guide them through the sale process. Through a quiet, yet competitive, sale process, where our Seafood Team leverages its extensive global network in the industry, we assist the client throughout the transaction until the deal closes. This way the owners manage to remain focused on their business operations and our team focuses on finding the right buyer who can meet the owner’s valuation expectations.
When working with acquirers, we tend to either bring opportunities to their attention or assist them in looking for an opportunity determined by pre-identified search criteria. Once the target has been identified, we initiate the discussion with the seller on the buyer’s behalf and start digging into the target’s financial and business operations to understand the value and potential synergies our clients can achieve from a potential acquisition. We assist our clients during negotiations of the transaction and, if specifically requested, we facilitate acquisition financing through our extensive relationships with commercial banks experienced in lending to the Seafood Industry.