Oceana reels in Daybrook
FISHING conglomerate Oceana cast its nets far and wide in search of global opportunities before settling on the $382m acquisition of US-based Daybrook Fisheries.
CAPE TOWN — Fishing conglomerate Oceana cast its nets far and wide in search of global opportunities, including three African countries, before settling on the $382m acquisition of US-based fishmeal and fish oil specialist Daybrook Fisheries.
Writing in the company’s just released annual report, CEO Francois Kuttel said Oceana had considered possible acquisitions relating to canned sardines in Morocco and frozen pelagic species in Angola, Mauritania and Morocco. The company had also mulled catching tuna and aquaculture ventures.
“Unfortunately, none of these opportunities offered sufficient required risk-adjusted returns.”
Oceana’s global push is not surprising since Mr Kuttel believed there were limited opportunities for deals in SA. “With fishing rights up for renewal in 2018 and 2020, and uncertainties regarding the … rights allocation, we are cautious about the potential to increase the scale and diversity of our fishing rights through organic growth in Southern Africa alone.”
Wessel Joubert, an investment analyst at Rezco Asset Management, Oceana could afford to pursue more selected international opportunities at the right price.
“Realistically, it might be two or three years before Oceana looked to land another big international acquisition. We believe they would first want to properly bed down Daybrook.”
Mr Kuttel said Oceana’s analysis had concluded that exposure to fishmeal and fish oil presented the most exciting potential for long-term growth.
He said substantial expansion in global aquaculture production would result in a significant demand for fishmeal and fish oil, which are both highprotein ingredients in feed.
Mr Kuttel said Daybrook would provide an attractive internal rate of return and strong earnings growth.
“Consolidating this operation with our existing fishmeal supply opportunities in SA, Namibia and Angola will significantly improve scale and mobility in the global fishmeal market.”