Seachill's £81m buy-out completes as 'considerable potential to build' is seized upon
By Grimsby Telegraph | Posted: 7 Nov 2017
A top 10 UK food manufacturing business has been created as Hilton Food Group's buy-out of Grimsby's Icelandic Seachill completed.
Shareholders in the FTSE-listed meat specialist overwhelmingly backed the £80.8 million deal yesterday (Monday, November 6), and the ultimate surf and turf union has now been formalised, having been agreed in October.
Robert Watson OBE, pictured, chief executive at Huntingdon-based Hilton, said: “We are pleased the acquisition has completed and look forward to broadening our offering into fish and seafood to our UK and overseas customers.
“We are excited about the opportunities the Seachill acquisition will bring to Hilton and see considerable potential to build the business alongside our existing meat offering.”
The admission of a further 7.35 million shares, which helped fund the purchase, was made ahead of the start of trading on the London Stock Exchange today (Tuesday, November 7).
Reykjavik-based investor-owners of Icelandic Group announced they were looking to sell the business in April, following a major turnaround and return to profit.
Formed in 1998 by executives Frank Flear and Mike Walker, who had left Bluecrest, it started life as a dedicated site for Tesco, in purpose-built premises on Great Grimsby Business Park.
Icelandic Group, owner of Coldwater on South Humberside Industrial Estate, bought it 10 years ago, and the business units were merged in 2013. Tesco still accounts for around 80 per cent of the business, with chilled and coated own label and wet fish counter production across the dual sites. Seachill is also the company behind the multi-award winning The Saucy Fish Co brand, and also holds the rights to The Saucy Meat Co label, which could prove fruitful.
When the deal was announced, having emerged in August, it was described as “strategically and financially compelling transaction” and an “attractive growth opportunity and entry into the processing and supply of fish in the UK,” by Mr Watson.
Hilton was set up in 1994 to provide a central supply chain for Tesco, with the UK's number one supermarket seen as a dealmaker in today's union. It comes as Saucy returns to nearly 500 outlets across the UK and Ireland.
Both have diversified significantly, with Hilton starting out purely in lamb and beef packing. It 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 and 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".
New branding for the Seachill business is already being rolled out, with Saucy Fish Co featuring strongly too. It has already been added to the portfolio on Hilton’s website, and the acquisition prompted a positive trading statement yesterday.
Seachill chief executive Simon Smith has also welcomed the deal being done as he looks forward to a new era for the Grimsby giant.
“It is a great pleasure to see the completion of this transaction,” he said. “Our new owners have been very clear that they want to build on the success that has been created at Seachill over the past few years and I and my team are excited to be working together with Hilton Food Group on the future expansion of the business.”
Hilton, a £1.2 billion firm, made a £34 million profit in 2016. Seachill returned £5.5 million, having turned over £266.3 million. The existing Seachill management team, led by Simon Smith who becomes a divisional head of Hilton, will remain in place. It employs 750 people directly, ramping up to 1,400 for seasonal highs.
Last month, 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.”