SYDNEY: Leading secondary producer of nutraceutical, seafood products and premium marine ingredients, New Zealand Coastal Seafoods Limited (ASX:NZS) has entered into a binding share purchase agreement with PXYY Pty Ltd and Nine Ocean Fishery Pty Ltd and Investment Advisers Alliance Pty Limited to acquire 100% Nine Ocean Group.
It is a condition precedent of the transaction that the company also enters into a share purchase agreement to acquire 100% of the issued share capital of Meridian Equity Pty Ltd, a related entity of Nine Ocean, for nil consideration.
Nine Ocean is a leading seafood fishing and wholesale export business headquartered in Cairns, Queensland with operations in the Torres Strait.
- Binding share purchase agreement secured to acquire 100% of issued capital in the Nine Ocean Group
- Strong earnings accretive proposition, with proposed deal terms offering compelling value for NZS shareholders
- Multiple business synergies identified including immediate and substantial cost reduction opportunities
- Nine Ocean is a leading seafood fishing and seafood product wholesale/export business headquartered in Cairns, Queensland
- Nine Ocean has an established market presence across Australia, considerable warehouse capacity, established supply chains and established revenue channels
- Nine Ocean had sales revenue of $1.64M in FY22 and NPAT margin of 37.75% (NPAT +15% YoY)
- Robust transaction terms with revenue growth milestones on deferred consideration shares: $3.1M at the end of 12 months and $6.2M for 12 months to end of 24 months
- Nine Ocean’s existing sales pipeline is underserviced. NZCS intend to deploy growth capital and acquire additional fishing fleet with a view to scale Nine Ocean’s existing operations
- The group has excellent environmental, social and governance (ESG) credentials through Australian Fisheries Management Authority (AFMA) regulation and local community engagement
- Unique opportunity to establish an Australian base and Trans-Tasman footprint with high-end seafood products, storage, processing and domestic/export sales
- Leverage Australia/New Zealand market position as noted supply jurisdictions for premium food products, targeting large Asian consumer markets
- 100% Share based consideration demonstrates confidence in the NZCS operation from the vendors.
New Zealand Coastal Seafoods CEO, Andrew Peti, said: “The proposed acquisition of Nine Ocean marks a unique opportunity to further establish NZCS as a leading producer of premium seafood products across Australia and New Zealand.
“Nine Ocean’s business model operates in strong alignment with NZCS’ current strategy, further leveraging its position as a preferred supplier of ethically sourced, high-quality seafood products, particularly for large Asian consumer markets. During our initial due diligence, the Company has identified a number of synergies and opportunities to drive growth. We also plan to commit capital and the existing management team’s experience to scale Nine Ocean’s operations for the benefit of NZCS.
“In addition, the proposed transaction terms offer compelling value for NZCS shareholders, with the opportunity to acquire a leading domestic seafood company at an attractive multiple of FY21 and FY22 unaudited revenues. Taking those factors into account, the NZCS management team views the proposed transaction as a transformational acquisition for the business, with the capacity to add materially to long-term revenue and net profits.”