A small fish swallowed a bigger fish when the U.K.'s Benchmark Holdings bought Belgium's Inve Aquaculture from Coöperatieve Rabobank and Royal Bank of Scotland in December for about £227 million ($321.8 million).
Before making its move, the Sheffield, England-based buyer spent four years studying Inve, during which time Benchmark went public with a listing on London's small-cap exchange, added salmon breeding and genetics through acquisitions in Norway and Iceland, and tilapia genetics and breeding through another Norwegian purchase. It watched as Inve's creditors took full control in a 2012 debt-for-equity swap and reshaped the entity into a business with 20% of the world market for shrimp and fish hatcheries and nurseries. Benchmark approached Inve long before an auction was ever in the cards.
"It was a complicated deal, but sometimes the way you structure a transaction can improve the outcome for both parties," said Benchmark CEO and co-founder Malcolm Pye. "To do that, you have to really get inside the business you're seeking to acquire. This was a long piece of work for us and we were really excited to get over the finish line."
Benchmark raised £185.7 million from investors to finance the deal.
"It's clearly more challenging for a small issuer to raise large sums," said Travers Smith's Anthony Foster, Benchmark's legal adviser, "but it definitely can be done, especially if they operate in a hot sector that reflects a robust long-term trend rather than just a fad."
That's certainly true of aquaculture -- the farming of fish, crustaceans, molluscs and plants -- for human consumption. It's a $140 billion-plus industry projected in a 2015 study by Grand View Research to surpass $200 billion by 2020.
By 2022, annual per capita consumption of fish is projected by the United Nations' Food and Agriculture Organization to rise to 20.7 kilograms, or 45 pounds, up from 18.9 kg in 2010 and 9.9 kg in the 1960s meat-and-potatoes-heavy era.
Today on every continent except Africa, people are eating more fish amid an expanding, more prosperous, urban population favoring healthier lifestyles and more sophisticated tastes. The main growth comes from China, which is also the biggest fish producer.
Global supply chains make it possible to get Canadian lobster in Brussels, sushi in landlocked Hungary, and Dover sole far from the famous white cliffs of the English Channel port town. But nature is overstretched.
"There is a growing awareness that the ocean is not going to provide all of our seafood needs going forward, which definitely means we need to think of alternatives," said Monica Jain, founder and director of Manta Consulting, of Carmel, Calif., and also of the bi-annual Fish 2.0 convention connecting sustainable seafood businesses with investors.