October 5, 2010

Umami proceeds with Baja Aquafarms purchase

Umami Sustainable Seafood Inc has completed the acquisition of Baja Aquafarms, a leading producer of bluefin tuna based in Mexico.

Umami had acquired a 33% interest in Baja earlier in July 2010. The board of directors of Umami have decided to exercise its option of acquiring the balance of the shares in Baja, with closing scheduled to take place by November 30, 2010.  

Under the terms of the acquisition agreement, as amended, the total purchase price for 100% of Baja is US$28 million in a combination of cash and stock, of which US$8 million has been paid to date, together with various working capital advances to be made to Baja by the company through the application of proceeds of inventory sales during the balance of the year.

In announcing the revised agreements, Oli Steindorsson, chairman of Umami, said the completion of this acquisition would represent a key step in the company's strategy of becoming the world's leading producer of bluefin.

"Coming off the back of very successful fishing seasons in both our Croatian and Mexican operations, we are in a situation of being well stocked with inventory at a time of sharply rising prices due to a combination of factors, including increasing global demand for quality sushi and sashimi," Steindorsson said.

"Against the background of our recent expansion and continuing improvements in our existing operations, we believe that our financial performance will be significantly enhanced by our combination with Baja, particularly given the synergy to be derived from rationalisation and consolidation of our marketing and distribution. Baja is a company with whom we are very familiar and their management team has done a superb job in developing a world-class bluefin farming operation," he said.

"Following the acquisition of Baja and on a combined basis, we believe that Umami will account for over 20% of the global market for farmed bluefin tuna, which will elevate the operating scope of our well refined, sustainable production platform and should enable us to have a meaningful impact on efforts to normalize the global supply of bluefin which has historically suffered from overfishing," he said.

Umami owns and operates Kali Tuna, which is an established Croatian-based aquaculture operation raising northern bluefin tuna in the Croatian part of the Adriatic Sea.