Thai Union Frozen Products Public Company Limited (TUF), for the second time within a month, announced today that it has entered into an agreement to acquire 100 percent of the assets and the trademark of the world’s top ten seafood brand*- ‘King Oscar’, originating from Norway with a strong brand heritage of more than 140 years. King Oscar Holding AS is owned by the private equity fund Procuritas Capital Investors IV in the Nordic Region.
Closing is subject to required regulatory approvals which are expected in Q4 2014.
‘King Oscar’, number one in premium sardine category in, Norway, USA and Australia posted sales of USD 80 million with EBITDA margin of around 12 percent in 2013. As one of the leading canned fish suppliers in Norway, USA, Poland, Belgium and Australia, King Oscar has an average growth rate of 6 percent per annum for the past five years. With a headquarter in Bergen, Norway, ‘King Oscar’ has two world-class production facilities in Poland (Gniewino) and Norway (Svolvær) with a total combined production capacity of 135 million cans and a workforce of 500 people, producing and selling 90 million cans per year covering 16 markets globally. It is amongst the top ten strongest seafood brands in the world.
According to Mr. Thiraphong Chansiri, President and CEO of TUF, “we are in a full mode for investment. At this pace with our business expansion, I am confident we will hit our revenue target of USD 8 billion by 2020 if not before. The deal will have a positive contribution to TUF’s earnings by increasing TUF’s group revenues with an estimation of 2 percent. It is a relatively small, but highly strategic acquisition for our group. It will give us a unique position and an opportunity to build ‘King Oscar’ brand in the market worldwide and into our global brand portfolio.”
“Even after this transaction, our net-debt-to-equity ratio of 0.8 time is still in a comfortable range. Our calculated direction for growth within the Group’s six strategic business categories has become even stronger and more prevalent with this world-class brand acquisition. In addition to organic growth, mergers and acquisitions will continue to be the company’s key strategy for business expansion in both short and long term.”
‘King Oscar’s prestigious Royal Norwegian heritage travelled back in the history of more than 140 years with a special Royal permission to use King Oscar II’s name and photo on a line of the company’s products. King Oscar product range exclusively enhances the core strategic sardine category for TUF. The established facts for King Oscar encompass more than the quality of raw materials, these include world’s best product sourcing from the Norwegian fjords, North Sea and Baltic Sea, backed by King Oscar’s solid footing in the brand.
“We are not only acquiring the company’s valuable assets but its most prestigious heritage that comes with them. I cannot be more pleased that Thai Union has an honour to be part of such heritage. The brand of this nature with the Royal identification and appreciation are not easily found or become available. I am delighted that the management team of King Oscar, with their long experience in these products and markets, has agreed to join the bench of Thai Union Group to help us develop this very unique branded business further over the next generations.” Mr. Chansiri cited.
In the light of the above, TUF is reinforcing its global leadership position within the seafood industry with the purchase of one the world’s strongest brand like King Oscar. The highly unique products and its premium trademark present a great compliment to TUF’s existing portfolio of the leading global brands namely; John West, Parmentier, Petit Navire, Mareblu, Chicken of the Sea and Sealect. Moreover, the partnership will significantly strengthen TUF’s brand presence in Scandinavia as well as its manufacturing footprint in Poland as one of the Group’s state-of-the-art production hub.
“It is more than a phenomenon. Proven by King Oscar renowned success in the past, geographical expansion of a brand name of such value is not beyond doubt. Similar to our long standing values, TUF is committed to take on King Oscar’s shared values on responsible sourcing, sustainable business conduct and protection of the nature.” Mr. Chansiri concluded.
Mr. Geir-Arne Asnes, CEO of King Oscar stated “It is no exaggerating to say that effective production with highly efficient infrastructure, well-invested world-class facilities and significant canned seafood manufacturing expertise, we are geared up for sustainable growth. We share the same vision as TUF- a vision of technological advancement on innovation and premium quality focus. By joining TUF, it is truly the moment for expansive phase for ‘King Oscar’ brand worldwide.”
“The acquisition is firmly in our target market of brand expansion and is uniquely synergistic to TUF’s strengths. Our expertise in significant canned seafood manufacturing should be beneficial to developing the next level of brand success globally.