Grimsby seafood giant behind Tesco's fish counters is bought out in £81m deal
DEAL DONE: Icelandic Seachill will be acquired by Hilton Food Group.
By Grimsby Telegraph | Posted: 18 Oct 2017
GRIMSBY seafood giant Icelandic Seachill is heading back into British hands after Hilton Food Group agreed an £80.8 million buy-out.
The purchase by the FTSE-listed meat specialist comes with a clear intention to grow and invest as it seeks to bring state-of-the-art technology as well as capacity increases to the town, while building internationally.
Seachill is a major supplier to Tesco and other huge retailers, as well as being the company behind The Saucy Fish Co brand.
Announcing ahead of the stock market opening today, (Wednesday, October 18), the Huntingdon-based business said it was a “strategically and financially compelling transaction” and an “attractive growth opportunity and entry into the processing and supply of fish in the UK”.
To part-finance the deal it placed more than seven million shares, raising £55.9 million within the first 80 minutes of trading. Shares also closed up nearly 6.5 per cent on 840p after the day's trading, having opened at 790p.
Robert Watson OBE, pictured left, chief executive of Hilton, said: “The processing and supplying of fish and seafood into the UK is an attractive and growing market and one where we see considerable opportunities to build Hilton's business. Our initial discussions with key customers support this view and we look forward to broadening our offering to both our UK and overseas customers alongside our existing meat business.”
Tesco was seen as deal-maker in the transaction, with Hilton a supplier and Seachill having been set up nearly 20 years ago to deal exclusively with Britain’s biggest retailer, as was Hilton some four years earlier, in 1994.
Both diversified significantly, with Hilton starting out purely in lamb and beef packing.
Seachill, having initially spun out of Bluecrest, which became part of Young's, was bought out by Icelandic Group in 2004, and then merged with Coldwater in 2013. It now employs around 1,400 people across dual sites spanning the western entrance to Grimsby, with wholly owned specialist smoker Russells too.
Major reorganisation and a huge turnaround has seen the past two years return to strong profit and growth, and earlier this year Icelandic announced it was looking to sell, having divested Far East and European processing operations.
The deal, which first surfaced in August, is expected to complete on November 7.
Hilton, a £1.2 billion firm, made a £34 million profit in 2016. Seachill returned £5.5 milion, having turned over £266.3 million.
Hilton has grown significantly in the UK and abroad, with the buy-out of a packing facility in Holland, new-build factories in four more European countries, as well as joint venture agreements in Australia and Portugal.
Major investment from the enlarged group has been outlined, including increasing capacity and using experience in robotics ans automated processes to "develop state-of-the-art facilities in the assembling, packing and distributing of fish products, which will deliver even higher quality and better value to the consumer".
Hilton added in a statement that is is keen on "expanding into overseas territories using the Seachill management team's expertise in the fish category, following the successful model of its recent overseas expansion alongside key customers in Portugal and Australia."
As understood by Humberbusiness.com when interest first emerged, it will also seek to expand the The Saucy Fish Co. brand into other categories both in the UK and overseas, with Seachill owning the rights to use The Saucy Meat Co.
Icelandic said the sale of Seachill, pursued from April from Reykjavik, "received significant interest from multiple parties on a global basis". It confirmed Seachill will become a standalone division of Hilton following completion, with the existing Seachill management team remaining in place.
Herdís Dröfn Fjeldsted, chairman of Icelandic Group and chief executive of owner Icelandic Enterprise Investment Fund, said: “This agreement to sell the business comes after the completion of a very successful re-organisation of our UK businesses under the current management team into a single business known as Seachill, which has given a scale that has enabled the growth of stronger and more successful strategic relationships with customers and suppliers. It is clear that Hilton is very well positioned to deliver further success for the business.”
The deal was welcomed in Grimsby. Simon Dwyer, who plays a key part in the industry cluster organisation Seafood Grimsby and Humber, and is secretariat of Grimsby Fish Merchants' Association, said: "It is safe to say Hilton has acquired the jewel in the crown. It is a global branded seafood business and I can only think that it is long-term good news for the local team and Grimsby."