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.
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.
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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.