Brimstone today announced that it has entered into a share purchase agreement with Kagiso Strategic Investments III Proprietary Limited (“Kagiso”) to acquire Kagiso’s interest in Sea Harvest. This transaction with a purchase price of approximately R270million will increase Brimstone’s effective shareholding in Sea Harvest from 58.44% to 85%.
Sea Harvest is one of the largest vertically integrated fishing companies in South Africa. Established in 1964 and employing over 2,400 people. Sea Harvest is a significant economic driver on the West Coast of South Africa. It owns 12 deep-sea fishing trawlers, processes approximately 40,000 tonnes of fish in Saldanha as well as on the Indian Ocean coast in Mossel Bay and has considerable expertise in the fishing industry. It is an efficient and cost effective operation with ongoing development of new technology and processes. The shorebased plants incorporate state-of- the-art equipment and techniques and produce a range of natural and coated products for both retail and foodservice markets locally and internationally.
In December 2015, Sea Harvest acquired a 19.9% shareholding in Mareterram Limited (“Mareterram”), which is a vertically integrated agri-business listed on the Australian Stock Exchange (“ASX”). It is the single largest licence holder in the Shark Bay Prawn Fishery in the Gascoyne region of Western Australia, and primarily catches king, tiger and endeavour prawns, as well as scallops. Mareterram Trading, the food service division of Mareterram, manages the sales of the product from Shark Bay alongside other premium, sustainably caught seafood and other food service products sourced from its worldwide network of key suppliers, including Sea Harvest. Mareterram Trading has been Sea Harvest’s distribution agent in Australia for the last 52 years.
“We are excited by the long term prospects of Sea Harvest and have faith in the current management team’s ability to create value for Sea Harvest shareholders.” – Fred Robertson
“Having been shareholders in Sea Harvest since 1998, Brimstone has a high level of familiarity with the Sea Harvest business and the South African fishing industry. We have been stakeholders in the fishing sector for 20 years. We are excited by the long term prospects of Sea Harvest and have faith in the current management team’s ability to create value for Sea Harvest shareholders. Sea Harvest also provides a Rand hedge to Brimstone’s earnings given that approximately 60% of Sea Harvest’s profits are earned offshore. This will be further supplemented by Sea Harvest’s proposed acquisition of a controlling stake in Mareterram”, says Fred Robertson, Executive Chairman of Brimstone.
In a separate announcement released today Sea Harvest is set to acquire up to 59.6% of the equity of Mareterram. Sea Harvest is currently the largest shareholder in Mareterram, with a total shareholding of 19.9%. If all Mareterram shareholders accept the offer, Sea Harvest’s shareholding in Mareterram will increase from 19.9% to approximately 59.6%. Sea Harvest’s offer is conditional upon (amongst other things) achieving a 50.1% shareholding in Mareterram.
There are many synergistic benefits to both Sea Harvest and Mareterram, including product and geographic diversification, global supply chain access, product improvement and distribution diversity, and expertise and operational synergies.
“These transactions further demonstrate our commitment and support to both the sector and to the management and staff of Sea Harvest.” – Fred Robertson
Fred Robertson concludes, “The effect of both these transactions will be value enhancing to our shareholders in the long-term. These transactions further demonstrate our commitment and support to both the sector and to the management and staff of Sea Harvest.”