Change Capital sells Macduff seafood share to Clearwater for £49.2m

The deal earns Change Capital 2.7 times the equity it invested in the scallop fishing company as Macduff's founders, the Beaton Family, also exited in a £98.4m deal.

Private equity firm Change Capital Partners has sold its 50 percent stake in Scottish shellfish company Macduff to Canada’s Clearwater Seafoods for £49.2 million ($75.4 million; €66.5 million), earning 2.7 times the capital it invested.

Change Capital’s partner and Macduff’s founder, the Beaton family, also sold its 50% share of the business at the valuation of £98.4 million, which included £4 million of seasonal working capital debt. Change Capital invested in the business four years ago to help drive Macduff’s expansion in a fragmented market and tap into rising global demand for premium caught shellfish.

“When we invested in Macduff in 2011, there was a compelling opportunity to transform the business through international expansion and strategic acquisitions. Thanks to our highly successful partnership with the Beaton family and management we have delivered on all fronts,” Change Capital partner Steven Petrow said in a statement.

During Change Capital’s investment period, Macduff acquired a string of fishing vessels and rival businesses. Its deals included buying the shellfish trading arm of Devon, England-based family business the Greendale Group, and a processing plant from Young’s Seafood in Stornoway on the Isle of Lewis.

Macduff now owns 14 scallop-fishing vessels and had an annual turnover of £52 million in the 12 months to end-September 2015. It achieved adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of £9.2 million over the same period. Thanks to recent fishing fleet acquisitions and authorisation to fish for other shellfish, including whelks, EBITDA for 2016 is expected to rise to £11.5 million. The deal values Macduff at 8.2 times its expected profits.

The company has also been expanding its distribution from its principally European base. Macduff has secured new distribution in China and the US, and before the acquisition wanted to build its sales in the two markets to 50 percent of total sales.

The deal gives Toronto-based Clearwater a stronger presence in Europe, while helping Macduff achieve better distribution in its target markets. Clearwater, already North America’s largest fisher, processor and distributor of premium shellfish, has also been growing rapidly and recorded sales of $445 million in 2014, alongside EBITDA of $87 million.