Fishing partners hooking into Nordic venture

Doug McKay

Fishing company Sealord and its Japanese half-owner Nissui are paying just under $50 million for 70 per cent of Danish-based seafood marketer and distributor Nordic Seafoods AS.

Sealord's other shareholder is Aotearoa Fisheries, which manages Maori fishing assets from Treaty settlements.

The deal, announced last night and to be concluded next month, will see Sealord and Nissui each take a 35 per cent stage in Nordic, a move that will strengthen Sealord's existing European operations. It follows three years of monitoring Nordic's performance.

The exact cost of the 70 per cent stake was confidential at the request of the Danes but Sealord chief executive Doug McKay told the Business Herald it was "a touch less" than $50 million.

Sealord, based in Nelson, would fund its half of the purchase through a mixture of cash reserves and debt.

McKay could not provide a price-earnings ratio but said Nordic would contribute profits to Sealord straight away. "It will be a material contribution from year one."

The founding shareholders would retain a 30 per cent stake.

Nordic had annual turnover of more than $100 million a year, with 350 suppliers and 750 customers. A combined Sealord, Nissui, Nordic operation would have about 10 per cent of the European wholesale market for seafood, McKay said.

"When we add Nordic to our current European portfolio we have control of almost $500 million in European and UK sales, and a very strong platform for future expansion in these markets."

His company would get access to Nordic operations in 15 European countries including Germany, Poland and Russia, and the new operation would also be well-positioned to target emerging markets such as Eastern Europe.

Sealord has made record net pre-tax profits of more than $50 million in each of the past two financial years and McKay expected this year to produce a solid result as well.