August 17, 2023

Goldman Sachs subsidiary completes US$630 million acquisition of aquaculture firm Froy

Goldman Sachs subsidiary Falcon Bidco has successfully completed its purchase of a 72% ownership share in Froy, a notable aquaculture services company, the acquisition valued at an estimated NOK 6.6 billion (~US$630 million; NOK 10 = US$0.94), Seafood Source reported.

The sales process for this acquisition was initiated by SalMar in April. The decision followed SalMar's identification of its stake in Froy as a divestible asset in a January 2023 update. During that period, SalMar noted the emergence of robust interest in its holdings in Froy.

SalMar originally acquired its stake in Froy through the acquisition of NTS in December 2022. This move followed SalMar's successful competition against a rival bid from fellow salmon farming company Mowi. This acquisition occurred in close proximity to SalMar's merger with Norwegian Royal Salmon in November 2022, resulting in SalMar gaining complete ownership of NTS's outstanding shares.

The transaction has been executed by Falcon Bidco, a company indirectly and entirely owned by infrastructure funds managed under Goldman Sachs Asset Management. In accordance with the terms, a cash consideration of NOK 76.50 (~US$6.93) per share will be remunerated to SalMar. In combination with the 62,269,112 shares held by NTS, the total value of the transaction between Falcon Bidco and SalMar is estimated to be around NOK 4.7 billion (~US$448 million).

With the regulatory approval granted on 20 July, Falcon Bidco currently holds an extensive 90.82% of Froy's outstanding shares and voting rights. This substantial ownership position necessitated Falcon Bidco to extend a mandatory offer for all remaining shares of the aquaculture services firm. An official communication from Froy, posted on the Oslo Bors, outlines Falcon Bidco's intention to conduct a compulsory acquisition of the remaining shares "shortly prior" to launching the mandatory offer.

Froy, through its own release on its official website, stated that the overall acquisition, combining SalMar's shares and the remainder, represents a collective value of NOK 6.6 billion (~US$620 million)

Tony Foss, chief executive officer of Froy, expressed enthusiasm about the acquisition's affirmation of their sound business model and its contribution to the company's future development. In a release, he extended gratitude to the company's employees, customers, and partners for their unwavering support as Froy embarks on a new and promising chapter.

Notably, Froy's recent performance prior to the acquisition revealed strong results in Q2. The company generated revenue of NOK 518 million (~US$49 million) and reported earnings before interest, taxes, depreciation, and amortization (EBITDA) amounting to NOK 171 million (~US$16.4 million).

-      Seafood Source