Carlyle-backed China Fishery in $277m Peruvian deal
China Fishery, an industrial fishing company part-owned by The Carlyle Group, will pay $555.8 million for Peruvian counterpart Copeinca. The acquisition will make China Fishery the largest player in the world’s largest market by volume for fishmeal and fish oil exports.
The company has offered NOK3.85 per share in cash for all outstanding shares in Oslo-listed Copeinca, which represents a premium of 21.6% to the company's closing price on February 25. China Fishing has already won the support of shareholders owning 14.2% of Copeinca, has attained an option over a further 10.8%, and believes it can secure the backing of another group controlling 16.5%.
The deal will be supported by a fully underwritten rights issue worth at least S$344.2 million ($277.5 million) plus $295 million debt and unspecified balance sheet capital. The rights issue will be priced at S$0.34 per share, a 50.7% discount to Singapore-listed China Fishery's February 25 closing price. Pacific Andes, which owns 70.5% of the company, will subscribe to at least 81.8% of the rights issue.
"The acquisition of Copeinca would significantly expand our presence in Peru, as it secures an attractive and well-managed fishmeal and fish oil focused business at a fair and reasonable valuation, along with the potential to deliver high-level synergies across both Copeinca's and our existing Peruvian fishmeal businesses," said Joo Siang Ng, China Fishery's managing director.
Carlyle invested $151 million in the company three-and-a-half years ago via its third Asia buyout fund. According to China Fishery's 2012 annual report, the private equity firm holds an 11.1% stake.
Pacific Andes acquired a majority interest in China Fishery in 2004, adding industrial fishing capabilities to its existing trading and processing operations. The company went public in Singapore two years later. It specializes in three major fish species, Pollock, Jack mackerel and Peruvian anchovy. The latter is used for fishmeal and fish oil, which account for 30% of overall revenues.
China Fishery posted a profit of S$95.9 million in 2012, down from S$133.7 million, as revenues dropped 16% to S$741.9 million.
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