Pacific Andes invests in Australia stock exchange listed farmed salmon company
Singapore Exchange Mainboard-listed Pacific Andes Resources Development Limited, a leading global frozen fish supplier with an integrated supply chain spanning industrial fishing, global sourcing and ocean transportation, is pleased to announce that the Group has signed a Sale and Purchase agreement to acquire 19.76% of ASX-Listed Tassal, a vertically integrated salmon grower, processor, seller and marketer, for A$51.7 million (approximately S$67.0 million), reports www.megafishnet.com with reference to Pacific Andes.
Commenting on the investment, Executive Director and Chairman, Mr Ng Joo Siang said: "As Australia's largest producer and marketer of salmon with highly recognised brand names, Tassal is well-positioned as a clear market leader to benefit from the growing Asian demand, particularly in China and metropolitan South East Asia, for salmon. PARD is always on the look-out for opportunities to invest in high-quality resources that are limited in supply, yet enjoy a strong demand. Tassal is a perfect investment fit for the Group. Seafood is an industry that the Group is very familiar with, and the Australian farmed salmon industry is well-protected with high barriers to entry. The Australian Quarantine and Inspection Service (AQIS) import restrictions and the Tasmanian Government Biosecurity measures combined result in one of the world's most controlled and healthy farmed salmon supplies. "
Since its establishment in 1986, Tasmania-based Tassal has grown along with the continuously rising demand for seafood. Led by rising population and income, increasing preference for a healthier diet and improvements in cold-chain supply system, the seafood industry looks set to continue this uptrend. With this investment, the Group gains a platform that will offer PARD a deeper insight into a new seafood business that offers high growth potential due to favourable supply-demand dynamics.
Mr Ng added, "Tassal has a strong management team at the helm that has delivered EBITDA growth of 34% CAGR over the past 5 years to reach A$50.3 million in FY2010. The company's strong fundamentals, exciting growth prospects and attractive valuation make this a compelling investment for PARD and we look forward to positive outcomes from this investment."
The acquisition of 28,910,367 shares in Tassal at the price of A$1.79 per share will be accounted for as quoted equity shares, and the consideration will be funded entirely from internal sources. The Group expects the S&P Agreement to be completed by January 2011.