SalMar plans sale of subsidiary Frøy to Goldman Sachs for over USD 430 million

Frøya, Norway-based SalMar has reached an agreement to sell its wellboat and aquaculture service subsidiary Frøy to Goldman Sachs.

SalMar has been planning to sell its 72 percent stake in Frøy for months, announcing it had classified it as an asset for sale in January 2023. Frøy conducts salmon-farm installation, maintenance, inspection, fish transport, treatment, sorting, and counting tasks, has 80 vessels, and has approximately 800 employees.

SalMar said it received “strong incoming interest” in Frøy, and has now officially struck a deal to sell to Falcon Bidco, a company indirectly wholly owned by infrastructure funds managed by Goldman Sachs Asset Management. A cash consideration will be paid to SalMar at NOK 76.50 (USD 6.93, EUR 6.47) per share.

At its last update, SalMar reported that its subsidiary, NTS, which SalMar took control of in December 2022, held 62,269,112 shares in the company. That would value the transaction between Goldman Sachs and SalMar at roughly NOK 4.7 billion (USD 431 million, EUR 402 million)

Following the sale, Goldman Sachs will then make a mandatory offer to the shareholders of the remaining 28 percent of the company. All told, according to SalMar, the sales consideration places a total value on Frøy of roughly NOK 6.6 billion (USD 598 million, EUR 558 million).

“We are pleased to have successfully completed the strategic review in Frøy announced earlier this year,” SalMar CEO Frode Arntsen said in a release. “Following a constructive process and after reaching a final agreement we believe we have found the best solution, not only for the SalMar group, but for all shareholders in Frøy. Following a successful process with many highly reputable interested parties involved, we have found a buyer for the shares in Frøy who we believe is a good fit and will be a strong partner for Frøy in the future.”

The sale is still subject to a few conditions, including approval from competition authorities, and an exemption from the Norwegian Ministry of Trade, Industry, and Fisheries “with respect to the nationality requirements for ...  registration in the Norwegian Maritime Code applicable to the vessels owned by the company,” SalMar said. The sale could also be delayed or halted if any relevant authority takes “any form of legal action,” the company said. 

With those conditions met, the company said it expects the sale to be completed in Q3 2023.

“We are excited to invest in Frøy, as one of the leading companies providing mission-critical transportation and support infrastructure to the aquaculture industry,” Goldman Sachs Asset Management Global Co-Head of Infrastructure Tavis Cannell said. “Wellboats and service vessels are vital to enabling best-in-class farming practices and Frøy is at the forefront of driving sustainability. We look forward to partnering with Frøy and its management team, employees, and longstanding customers in supporting long-term growth and value creation.”  

Frøy reported Q1 2023 revenue of NOK 519 million (USD 47 million, EUR 43 million), up from NOK 431 million (USD 39 million, EUR 36 million) in Q1 2022. The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) also increased to NOK 121.8 million (USD 11 million, EUR 10 million), up from NOK 111.6 million (USD 10 million, EUR 9 million) in Q1 2022.

Photo courtesy of Frøy