Laguna Bay makes A$32m offer for ASX-listed Angel Seafood

Laguna Bay has made a non-binding indicative offer of A$0.20 per share in cash for Angel Seafood and has entered a period of exclusive due diligence.

Laguna Bay has made an offer to acquire Australian Securities Exchange-listed oyster producer Angel Seafood.

The deal would see Laguna Bay acquire all the shares in South Australia-based Angel Seafood it does not already own for a cash consideration of A$0.20 per share, valuing the business at A$32.3 million ($23 million; €20 million). Laguna Bay and associated entities already own 19.9 percent of Angel Seafood’s shares.

The indicative, non-binding and conditional proposal represents a 60 percent premium to Angel’s closing share price on December 17 of A$0.125 per share and a 50 percent premium to Angel’s volume weighted average share price over the 30 days prior to December 17 of A$0.133 per share.

In a statement to shareholders, Angel Seafood said Laguna Bay had indicated its “strong preference” was for the listed company’s founder and CEO Isaac Halman to retain a “significant proportion of their shareholding,” although the extent of that shareholding was not confirmed.

The board of Angel Seafood said it considered that it was in the best interest of shareholders to engage further with Laguna Bay on its offer. The firm said it had entered an exclusivity deed and a cost letter with the fund manager to allow it the opportunity to conduct due diligence on an exclusive basis until February 10, 2022.

In investor documents, Angel Seafood says it is the largest producer of certified organic pacific oysters in the southern hemisphere. The firm produces oysters in three bays across the Eyre Peninsula in South Australia, with its facilities covering approximately 43 hectares.

According to its most recent half-year results, Angel Seafood achieved revenues of A$3.6 million for the six months ended June 30, 2021, up 46 percent on the same period a year prior. It also achieved EBITDA of A$1.3 million, up 166 percent, and a net profit after tax of A$489,000, up from a A$160,000 loss.

The firm said then that it had a strategy to double its production capacity from 10 million to 20 million oysters per year, improving profit margins by decreasing unit costs as production increased.

Laguna Bay was unable to comment on the deal or which of its funds and associated entities is behind it.

Earlier this year, Laguna Bay completed the sale of its first asset from Agricultural Fund I, a vehicle backed by the Washington State Investment Board and other investors, which closed in 2016 on approximately A$300 million.