ContiSea, LLC–a joint venture of ContiGroup Companies and Seaboard Corporation–and Fjord Seafood ASA have signed a Letter of Intent to merge.
Under the terms of the transaction, ContiSea will incorporate its operations into Fjord, and ContiSea’s owners will receive shares totaling 18% (approximately USD 60 million) of the merged company. As a result of the merger, Fjord Seafood will strengthen its position in the USA, the world’s fastest growing market for Atlantic Salmon.
Based in Belfast, Maine, ContiSea has approximately 360 employees and includes two wholly owned subsidiaries: Atlantic Salmon of Maine, LLC and Ducktrap River Fish Farm, LLC. Fjord Seafood, based in Oslo, Norway, is one of the world’s largest producers and suppliers of salmon and salmon products, with approximately 2,700 employees and operations in 15 countries.
“The merger with ContiSea provides us with a solid platform for further growth in the USA, the most rapidly developing market in the world for Atlantic salmon. In addition to acquiring ContiSea’s integrated aquaculture and processing operation in Maine, we will be gaining an excellent distribution network for the bulk of our salmon production in Chile,” said Fjord Managing Director Paul Birger Torgnes.
“Our merger with a company of the quality of Fjord Seafood will allow us to further access the US market through the coordination of sustainable aquaculture, branded product marketing, and close customer relationships,” said ContiSea CEO Desmond FitzGerald. “We see this as a very positive evolution for the future of Ducktrap River Fish Farm and Atlantic Salmon of Maine.”
“We’re very pleased to join ContiSea with Fjord Seafood and are excited by the opportunities that will arise from this partnership,” said Paul Fribourg, Chairman and CEO of ContiGroup Companies. “Our access to the U.S. market, combined with Fjord’s geographical reach and leadership in technology will provide a strong foundation for future growth.”
The Letter of Intent states that ContiGroup and Seaboard will actively participate in the ongoing development of Fjord Seafood ASA, and will have two members on the Board of Directors. Tom Royal, ContiGroup’s Manager of Aquatic Proteins and President of ContiSea, will be appointed to Fjord Seafood’s top management group, and will have principal responsibility for Fjord Seafood’s activities in North and South America. Rolf Domstein and Paul Birger Torgnes will continue respectively as Chairman of the Board and Managing Director of Fjord Seafood.
The Letter of Intent specifies that satisfactory due diligence will be carried out prior to the signing of the final agreement, and that the merger will be approved by the General Assembly of Fjord Seafood ASA. The transaction is expected to close in the first quarter of 2001.
ContiSea–Fjord Transaction Fact Sheet
ContiSea LLC. Formed as a holding company in 1999, ContiSea includes two wholly owned subsidiaries: Atlantic Salmon of Maine, LLC, an integrated producer of fresh salmon; and Ducktrap River Fish Farm, LLC, a value-added processor of premium-quality salmon and seafood products. ContiSea’s principal shareholders are ContiGroup Companies, Inc. and Seaboard Corporation, which together own 85% of the company.
Atlantic Salmon of Maine, LLC. Established by Morton Helgesen in 1987, Atlantic Salmon of Maine (ASM) is the largest integrated producer of fresh salmon in the United States, with 181 employees and an estimated year 2000 production of 7,000 tons. Overall, ASM controls 14 ocean sites with a potential future production capacity of approximately 15,000 tons, and owns 2 hatcheries currently producing 2 million smolt. The company produces salmon fillets in a 28,000-square-foot processing plant in Machias, Maine, and brands them under the name Majestic Salmon.
Ducktrap River Fish Farm, LLC. Ducktrap was established as a trout farm in 1978 by Des FitzGerald, the current CEO of ContiSea. By the early 1980’s, Ducktrap began experimenting with smoked seafood and developing its position as a leader in value-added seafood processing. Today, Ducktrap employs more than 150 people at its facility in Belfast, Maine, and produces over 35 different products–innovative interpretations of smoked salmon, trout, mackerel, sturgeon, bluefish, tuna, haddock, shrimp, scallops and mussels. The product assortment includes the brand names Kendall Brook, Winter Harbour, Spruce Point and Ducktrap River Fish Farm.
ContiGroup Companies, Inc. ContiGroup is a recognized leader in integrated poultry and pork production, cattle feeding, and aquaculture, with nearly 200 years of experience in agribusiness and global trade. ContiGroup’s Wayne Farms poultry business is the sixth-largest integrated poultry producer in the United States, and its ContiBeef cattle business is one of the world’s largest cattle feeders. Through its majority interest in Premium Standard Farms, ContiGroup is also the second-largest integrated pork producer in the United States.
Seaboard Corporation. Seaboard Corporation is a diversified and vertically integrated agribusiness and ocean transportation company with 1999 revenues of USD 1.3bn. Seaboard is currently the seventh-largest processor and third-largest producer of value-added pork products in the U.S. The company also owns or charters 30 marine vessels providing cargo service to 20 countries. Seaboard trades on the AMEX stock exchange under the symbol SEB.
Fjord Seafood ASA. One of the world’s largest producers and suppliers of salmon and salmon products, Fjord became a publicly traded company on the Oslo Stock Exchange in September 2000. In recent months, it has also acquired the Chilean aquaculture companies Salmoamerica and Tecmar, and (in cooperation with Domstein ASA) the European seafood company Pieters. Fjord’s salmon production for 2001 is expected to exceed 90,000 tons and with the merger, total annual production capacity for the company in Norway, Scotland, Chile, and the U.S.A. will reach approximately 120,000 tons.