Andromeda Group, an AMERRA Capital Management portfolio company headquartered in Greece, has acquired majority stakes in a pair of Mediterranean sea bass and sea bream producers.
Mubadala Investment Company, a $127 billion sovereign wealth fund owned by the Abu Dhabi government, participated as a shareholder in the transaction, which will see Andromeda take controlling stakes in Koropi-based Nireus Aquaculture and Selonda Aquaculture, which is headquartered in Paiania.
Nireus was founded in 1988 and specializes in the provision of whole, gutted, filleted, fresh and frozen sea bass, sea bream and meagre to customers in more than 35 countries. The vertically integrated company has four hatcheries, 31 fish farms, five packaging units and two factories that produce fish feed.
Selonda also specializes in sea bass and sea bream, and was founded in 1981. It maintains 55 sea-cage fish farms in Greece, six hatcheries, 14 packing stations, two processing plants and a fish feed production plant. Selonda supplies 32,000 tons of sea bream and sea bass annually to customers in more than 25 countries.
Doing just fin
AMERRA managing director Thor Talseth told Agri Investor that as a result of a debt-to-equity conversion carried out in 2015, a consortium of Greek banks own approximately 80 percent stakes in both Nireus and Selonda, both of which are listed on the Athens stock exchange.
In the initial phase of the transaction announced Wednesday, Talseth said, Mubadala is making an investment of an undisclosed size into Andromeda, which is buying the shares of the two companies owned by the banks. Plans then call for Andromeda to submit a mandatory offering for the remainder of the shares in order to take full control of the company.
Talseth declined to disclose Mubadala’s stake in Andromeda, adding only that the combination of its capital with AMERRA’s expertise creates a “powerful” force in the aquaculture market.
“Mubadala took the decision last year to build its presence in the agribusiness sector, which is strategically important to the global economy and has significant potential for value capture,” said Mubadala agribusiness director Elham Al Qasim. “Aquaculture is one of the most promising sub-sectors, where deployment of new technologies can drive productivity improvements.”
Through its investments in Niraeus and Selonda, Talseth said, Andromeda will continue to apply technology, equipment and farming practices developed for the salmon industry to other species in the Mediterranean region. For example, because feed costs can constitute as much as 60 percent of overall operating expenditure, Andromeda will look to build on its past practice of using larger feeding systems with camera systems that monitor the behavior of the fish in real time to increase efficiency of feed use.
The investment also provides an opportunity to take advantage of the region’s comparative advantage for aquaculture, said Talseth.
“Many of the typical risk factors for aquaculture don’t exist in the Mediterranean. For instance, extreme weather, as in hurricanes, don’t exist. Algae blooms don’t exist,” Talseth said. “For these particular species, and there are mainly three of them – Mediterranean sea bass, Mediterranean sea bream and Corvina – we believe there is big potential.”
Pension funds, endowments, sovereign wealth funds, private equity firms and family offices have all shown increased in interest in aquaculture in recent years, according to Talseth, who joined AMERRA in 2015 after stints as founding partner with seafood-focused Neptune Partners and head of seafood at Arctic Securities.
“It is a private and fragmented sector, so it’s often not easy to identify the opportunities as a generalist investor,” Talseth said.
Founded in 2009, AMERRA is a private alternative asset manager focused on upstream and midstream agribusiness in the Americas and Western Europe. The New York-headquartered firm deploys both debt and equity in its investments, which have included the March 2017 acquisition of a 90 percent stake in Marine Bioproducts (Biomega), a Norway-headquartered company that produces peptones, proteins and oils derived from salmon-farming byproducts.