Hilton Food Group acquiring Dutch Seafood Company for EUR 90 million

Huntingdon, United Kingdom-based Hilton Food Group is acquiring the Hardewijk, the Netherlands-headquartered Dutch Seafood Company for EUR 90 million (USD 101.5 million).

The acquisition gives Hilton Food Group, which purchased chilled fish supplier Seachill in 2017 for EUR 90.4 million (USD 106.4 million), a larger presence in the seafood industry and enters it into the U.S. market, where Foppen sells its smoked salmon via Costco and other retail outlets.

The Dutch Seafood Company, which was formed in August 2018 out of a merger between shrimp specialist Klaas Puul and Foppen – produces smoked products made from Norwegian salmon, rainbow trout, and sockeye salmon at facilities in Hardewijk and Preveza, Greece. Klaas Puul, a specialist in North Sea shrimp, was sold to Sykes Seafood in 2019.

Foppen had EUR 139.7 million (USD 157.7 million) in revenue in FY2021 and recorded an EBITDA of EUR 10 million (USD 11.3 million). To fund the acquisition, Hilton launched an equity placement on Friday, 10 December to raise GBP 75 million (USD 99.1 million, EUR 87.8 million)

“The acquisition of Foppen is an exceptional opportunity for Hilton and another step towards our goal of becoming the global protein partner of choice. More and more consumers around the world are seeking affordable, high quality, and sustainable protein, and this acquisition will help Hilton take our offer into new markets and to new global customers for the first time,” Hilton CEO Philip Heffer said in a 10 December press release. “Foppen’s premium product portfolio and strong customer relationships are a great fit for Hilton’s model, while Hilton’s strong ESG credentials in seafood will make sure our future growth plans are sustainable in every sense of the word. We welcome Foppen’s management and employees and look forward to delivering profitable growth through the combination of Hilton and Foppen.”

In its release, Hilton said it found Foppen an attractive acquisition target because “smoked salmon diversifies Hilton into a protein category with a strong growth outlook.”

“Foppen is focused on added value speciality smoked salmon products (e.g. toast salmon) which offer a differentiated portfolio of products,” the group said. “Foppen is expected to significantly enhance Hilton’s customer base through a number of new customers in the U.S., a new strategic market; the development of an important existing customer relationship (Albert Heijn in the Netherlands); and significant cross-selling opportunities to both Hilton and Foppen’s existing international customer bases.”

Foppen will “significantly expand the scale of Hilton’s seafood business with potential to deliver procurement and other savings,” Hilton said.

“Foppen brings two well-invested, dedicated smoked salmon facilities in Harderwijk, the Netherlands and Preveza, Greece, and an experienced management team and workforce,” it said. “Foppen stands to benefit from Hilton’s exceptional seafood standards and record, with 98 percent of all Hilton fisheries certified to the [Marine Stewardship Council standard] and active membership of the U.N. Global Compact and its sustainable ocean business action platform, as well as governance roles on leading global standards bodies such as the MarinTrust, GlobalG.A.P., and the Responsible Fishing Vessel Scheme.”

Hilton called Foppen a “clear market leader in the U.S. in smoked salmon specialties,” as 61 percent of the company’s 2021 sales were to U.S. customers. It’s also a leader in the Dutch market. Hilton noted the grocery retail market for smoked salmon in the U.S. grew by 29 percent, and the Dutch smoked salmon market grew by 11 percent between 2019 and 2020.

Hilton said Foppen’s plant in Greece afforded it a lower cost of labor versus U.S. processors, and that it produced sufficient volumes to achieve economies of scale. It also praised the experience of Foppen’s management team.

“Foppen has a proven track record of being profitable and cash generative, with underlying performance improvements,” it said. “This is largely driven by the increased focus on smoked salmon specialties and the discontinuation of non-salmon products, which relate to other seafood species (e.g., shrimp). There has been limited impact on the business from COVID-19."

Hilton added that Foppen will "deepen" the comapny's eafood capabilities and offerings. 

“Foppen represents an attractive opportunity to broaden and deepen Hilton’s seafood capabilities and offering to its U.K. and international customers," it said. "The acquisition expands the group’s portfolio into smoked salmon with a complete, differentiated portfolio of standard and specialty products and low-cost manufacturing capabilities. In addition, the acquisition expands Hilton’s customer portfolio and geographical reach to North America and Asia, including sales to Costco.”

While the Dutch Seafood Company recorded a net loss of EUR 200,000 (USD 226,000) for its fiscal year ending in March 2021, the value of its underlying assets increased to EUR 63.7 million (USD 71.9 million) and its “current trading in FY2022 demonstrates continued underlying growth, particularly in the U.S .market [and] underlying growth continues with volumes accelerating in U.S. customers.”

Foppen’s sales thus far in its 2022 fiscal year have been ahead of FY 2021, it said.

“We are excited by the future prospects of Foppen under Hilton’s ownership and look forward to working with Philip and team.” Foppen CEO Andre van der Padt said. “Foppen’s offer to customers, suppliers and employees will be enhanced as part of Hilton Food Group.”

Photo courtesy of Foppen