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May 18, 2021

Iceland Seafood International set to buy control of Spain’s Ahumados Dominguez

Iceland-based seafood processor Iceland Seafood International has moved to expand its presence in Spain with the purchase of 80% of local salmon, cod and trout supplier Ahumados Dominguez.

Under the terms of a letter of intent, Iceland Seafood International said it would pay 8.8 times Ahumados Dominguez’s EBITDA for the shareholding. In 2020, Ahumados Dominguez’s generated EBITDA of EUR1.7m (US$2.1m), pre-tax profits of EUR1.2m and sales of EUR19.3m.

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The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
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  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
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The remaining 20% of Ahumados Dominguez would be held by Pedro Mestanza, the Spanish firm’s managing director, who would continue to lead the company after the deal is completed.

Iceland Seafood International described Ahumados Dominguez as “a retail-oriented company with a strong brand and consumer recognition in the smoked salmon sector in Spain”. The deal will see Iceland Seafood International enter Spain’s salmon market. Salmon is one of the two “leading seafood specie” in Spain, alongside hake, the company added.

“The proposed acquisition will strengthen Iceland Seafood’s proposition in the Spanish retail market, as well as creating opportunities to utilise the platform Ahumados Dominguez has for selling high-quality cod products from Iceland,” Iceland Seafood International said. “By leveraging both the untapped opportunities Ahumados Dominguez has as a standalone company, and the opportunities that a partnership with Iceland Seafood creates, the aim will be to significantly grow sales and profitability in the coming years.”

The companies hope to finalise the deal in mid-July.

Alongside news of the potential acquisition, Iceland Seafood International reported a set of first-quarter financial results that included a rise in net profit from EUR1.9m a year earlier to EUR2.7m but a 1% dip in sales to EUR104.4m. Iceland Seafood International pointed to the impact of lockdown restrictions on the foodservice market. The deal for Ahumados Dominguez, it noted, could “improve [the] balance” between its foodservice and retail sales in Spain.

In November 2019, Iceland Seafood International announced the acquisition of Spanish seafood business Elba.

Last year, the company snapped up Ireland-based Carr & Sons Seafood from Sweden’s Mondi Group.

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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