November 15, 2010

Sanford buys Pacifica Seafoods unit for US$66 million

Sanford Ltd., New Zealand's biggest publicly traded fishing company, has agreed to buy the mussel and pacific oyster unit of Pacifica Seafoods Group.

The assets include 70 marine farms, 800 mussel growing lines, a processing plant and 10 vessels, Auckland-based Sanford said in a statement. The purchase price is NZ$85 million (US$66 million), it said.

Sanford will increase its leading share of New Zealand's mussel production market by buying its closest rival, the company said. Antitrust regulators last week approved the deal, saying it wouldn't significantly reduce competition.

"The acquisition is highly complementary with our existing aquaculture business," Managing Director Eric Barratt said. The deal will consolidate Sanford's position as New Zealand's number one aquaculture producer and exporter.

Mussels, oysters, and salmon grown in marine farms make up about 15% of New Zealand's NZ$1.3 billion (US$1 billion) a year of fish and shellfish exports.

The transaction will reduce costs and add to earnings in the year ending September 30, 2011, Sanford said. All 295 Pacifica workers will be offered jobs although there will be some restructuring where roles are duplicated, it said.

Sanford will use a three-year debt facility to pay for the acquisition, it said, without providing more details. First NZ Capital and lawyers Chapman Tripp were the company's advisers.