P Capital Partners has provided NOK 1,040 million to partly finance Altor and Bain Capital’s acquisition of EWOS. The commitment in EWOS is P Capital Partners’ largest to date.
On October 31 2013, Altor Fund III (“Altor”) and funds advised by Bain Capital Europe, LLP (“Bain Capital”) announced the closing of the acquisition of the EWOS group (“EWOS”) from Cermaq ASA based on an enterprise value of NOK 6.5 billion. To support the financing of the acquisition of EWOS, P Capital Partners has underwritten and provided a tranche of senior subordinated notes amounting to NOK 1,040 million, due in 2021 which will be listed on the Oslo Stock Exchange (the “Notes”).
Our analysis shows that the salmonid feed market benefits from structural growth trends, driven, inter alia, by the efficiency of salmonid farming and the positive health effects from eating fish compared to other proteins. Another key aspect of the investment by P Capital Partners is that EWOS is dedicated to reduce marine resources in its feed production to make them more sustainable through committing substantial resources to research and development each year. This commitment has positioned EWOS at the forefront of delivering value adding products to farmers and also enabled them to reduce the marine input in its feed production from some 70% ten years ago to ca. 30% today.
We value EWOS’ industry-leading market position and strong technological expertise, in particular within functional feed. Additionally, EWOS has a well-invested asset base which we expect shall enable a cost-efficient expansion over the coming years. With its experienced management team and supported by its new owners, Altor and Bain Capital, we believe EWOS will remain well positioned within its industry and continue to benefit from its market leading R&D and innovation capabilities.
EWOS, headquartered in Bergen, Norway, is the leading producer of salmonid feed worldwide, with a global market share of approximately 32% in 2012, based on estimated sales volume. EWOS operates primarily in Norway, Chile, Canada and Scotland which together represent more than 90% of the global salmonid farming market in 2012. Approximately 97% of EWOS’ produced feed volume consists of salmonid feed, with the rest of the feed targeting other marine species, such as yellowfin tuna, as well as freshwater species, such as snakehead, tilapia and pangasius. EWOS offers an extensive range of salmonid feed, from “standard feed,” which addresses the needs of salmonids at each stage of their life cycle, to “functional feed,” which supports the growth and health of salmonids.
EWOS has over 50 years of experience in the salmonid feed industry, and enjoys a long-standing reputation for technical expertise, customer service and innovation, built upon continually improving production processes and in-depth research and development. Over the years, EWOS has developed substantial knowledge of the nutritional requirements of salmonids and the nutritional profile of raw materials used in salmonid feed, including, for instance, a database that documents the development of over 745 million fish in Norway since 2000, based on analysis of more than 7,300 different fish cohorts.
Note that this is an announcement from P Capital Partners and not by Altor, Bain Capital or EWOS.
The Notes have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or other applicable securities laws. Accordingly, the Notes will be offered only to persons outside the United States in reliance on Regulation S under the Securities Act. This news release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.