September 11, 2006

 

Icelandic bank facilitates mergers among Canadian seafood companies

 

 

After enduring a downturn of a cycle that spanned 20 years, Canadian seafood firms are now poised to lead a wave of global consolidation at a time when they are doing better than ever before, an Icelandic investment firm expanding in Canada said.

 

Canada's commercial fishing industry is worth more than US$5 billion a year and employs more than 130,000 people.

 

However, the sprawling industry has had to deal with vexing problems such as low wages and depleted fish stocks. In spite of this, Glitnir said it is eager to finance mid-sized merger and acquisition deals up to the US$100-million mark.

 

The Reykjavik-based Glitnir Bank's clients include regional giants Clearwater Seafoods LP, High Liner Foods Inc and FPI Ltd.

 

There is a need for consolidation to create big global players, said Magnus Bjarnason, Glitnir's managing director for Asia and the Americas.

 

Bjarnason said unlike other banks, Glitnir understand cycles, adding that these can in fact be beneficial to the industry.

 

In just two years, Glitnir has already financed New Brunswick-based Cooke Aquaculture's efforts to buy over the East Coast operations of both Heritage Salmon and Norway-based Stolt Sea Farm.

 

Glitnir is also helping to bankroll Atlantic Canadian firms' efforts to gain exposure to international markets.

 

Furthermore, the bank recently signed a US$10-million equity financing deal with Ocean Nutrition Canada Ltd to help the company fund a new $23-million plant in Dartmouth to boost global sales of its flagship omega-3 powdered food additive.

 

Food processing firms use the powder to add nutritional value to products like yoghurt, bread and juices. Omega-3 fatty acids are commonly found in fish oil.