Tassal has responded to speculation and confirmed an acquisition of De Costi Seafoods is in the works.
Although an acquisition has not been formally finalised or completed, Tassal said the due diligence process on De Costi Seafoods has been completed and the tassal Board has approved for the proposed acquisition to proceed to formal documentation. The acquisition is expected to be completed in July 2015.
A non-binding Terms Sheet has been signed by the parties, with a few key terms.
The business will be acquired via a share purchase, free from all debt and other encumbrances and the sale will not include the business trading at the Sydney Fish Markets or the two retail outlets owned by Georfe Costi at Bondi and Chatswood.
Following the acquisition, George Costi will remain at the helm of De Costi Seafoods’ operations for a minimum period of three years and will report to Mark Ryan, Tassal Group Limited Managing Director and CEO.
Ryan said the move to acquire De Costi Seafoods was strategic.
“De Costi Seafoods provides Tassal with an attractive vehicle to deliver the company’s salmon and seafood growth strategy, which is about maximising domestic market per capita consumption of seafood. The seafood market in Australia is assessed at $4.3 billion per annum
“This acquisition would allow us to build on Tassal’s successful domestic market focus with salmon, increase Tassal’s vertical integration into salmon, and further drive scale, and the efficiencies and benefits that will flow from the increased scale that the seafood offering will bring,” Ryan said.