Cooke reaches agreement to acquire Tassal

Canada-based Cooke Inc. announced on 15 August that the company has reached an agreement with Tassal Group Limited to purchase the Australia-based aquaculture company.

In a release, Cooke announced the two companies reached an agreement that would have Cooke purchase all outstanding shares of Tassal for AUD 5.23 (USD 3.65, EUR 3.60) per share in cash, by way of a scheme arrangement. The transaction price, according to Cooke, represents a 49 percent premium on its share prices as of late June and values the company at approximately AUD 1.1 billion (USD 769 million, EUR 759 million).

“Tassal announces today that, following receipt of a revised indicative proposal from Cooke, it has entered into a SID [Scheme Implementation Deed] with Cooke under which a wholly-owned subsidiary of Cooke will acquire 100 percent of Tassal’s ordinary shares by way of the scheme,” a release from the Tassal Group states.

The purchase is the conclusion to a multi-week effort on Cooke’s part to acquire Tassal. In late June, documents filed to the Australian Stock Exchange (ASX) revealed that Cooke acquired a nearly 5.4 percent stake in the company, with a total value of AUD 41.1 million (USD 28.7 million, EUR 28.3 million). The filing also revealed Cooke had been planning a move in Australia for some time, as it had established multiple new subsidiaries:  Aquaculture Australia Company Pty Ltd, Aquaculture Australia Midco 2 Pty Ltd, Aquaculture Australia Midco 1 Pty Ltd, and Aquaculture Australia Holdco Pty Ltd.

A day after the initial share purchase, Tassal announced that Cooke had attempted to purchase the company outright multiple times, making offers of AUD 4.67 (USD 3.26, EUR 3.22), AUD 4.80 (USD 3.35, EUR 3.31), and AUD 4.85 (USD 3.39, EUR 3.34). However, the company’s board said it had evaluated the proposal and found it did “not reflect the fundamental value of the business and is not in the best interests of the shareholders.”

Cooke’s interest in Tassal, however, didn’t stop there. Cooke continued to buy stakes in the company, upping its stake to 7.6 percent on 1 July, then 8.9 percent on 12 July. Then, it pushed its stake to 10.49 percent on 19 July, bringing its total investment in Tassal shares to AUD 92 million (USD 64 million, EUR 63 million).  

Now, according to filings on the ASX and a press release by Cooke, the acquisition deal has finally been struck.

“Tassal is an excellent fit with Cooke, as we see many similarities between our two companies. Our people and communities are very comparable as well, with agriculture, fisheries, aquaculture, and forestry prominently supporting export-driven economies,” Cooke Inc. CEO Glenn Cooke said in a release.

Cooke has been trying to make inroads into the Australian aquaculture sector for some time. In 2021, the company attempted to purchase Tasmania, Australia-based Huon Aquaculture, an attempt that ultimately lost out to Brazilian meatpacking giant JBS.

Cooke’s acquisition comes as Tassal announced strong results for FY2022. The company saw a 33 percent increase in revenue year-over-year to AUD 789 million (USD 552 million, EUR 544 million), and the company’s statutory earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 36 percent year-over-year to AUD 163 million (USD 114 million, EUR 112 million).

The company also reached a total salmon production volume of 43,075 MT head-on gutted equivalent, an increase of 14.8 percent over FY 2021. That total will be added to Cooke Aquaculture’s salmon farming capacity – which is roughly 115,000 MT – and will put the combined companies in contention for a spot among the top-five salmon producing companies in the world.

“Our family-owned company is keen to have the opportunity to continue to grow Tassal from the strong base the employees, management, and board have created,” Cooke said. “We have demonstrated acquisition history where Cooke has left operations management in place for continuity. We are highly impressed with the quality of Tassal’s infrastructure, people and culture.”

The acquisition announcement also came the same day as Tassal announced it signed a Sustainability-Linked Loan for AUD 497 million (USD 348 million, EUR 343 million) worth of facilities – the first loan of its type for any aquaculture company in Australia. According to Tassal the loan will help the company reduce its greenhouse gas emissions, use its feed with greater efficiency, and commit to new continuous improvement initiatives to maintain Aquaculture Stewardship Council certification.

“While Tassal has been committed to sustainability for many years, this is still a significant step for Tassal and a first for aquaculture in Australia,” Tassal Group Managing Director and CEO Mark Ryan said in a release. “Integrating our sustainability performance with our financing framework is an important step in our responsible business strategy, accelerating our work towards our ambitious sustainability targets.”

Cooke said that the company plans to continue the sustainability focus of Tassal, and that it plans to continue working with stakeholders.

“We understand completely that the Tasmanian fish farming industry is Australia’s most valuable seafood production sector, and our top priority will be to work with other producers and government regulators on continuous environmental improvement plans as well as strengthening supply chain and local community relationships,” Cooke said. “We intend to make strategic investments in engineering, science and technology to further enhance Tassal’s capabilities, in addition to growing their sales reach through leveraging our worldwide seafood distribution channels.”  

Photo courtesy of Cliff White/SeafoodSource