The amount offered by Cooke Aquaculture to take Omega Protein private represents a 32.5% premium to the company’s October 5 closing price.
The Canada-based parent company of Cooke Aquaculture has bought Omega Protein, a specialty oils and protein products supplier.
Expected to close in early 2018, the deal will see PSP Investments-owned Cooke pay $22 per share for Omega, which listed on the New York Stock Exchange in 1998. That price represented a 32.5 percent premium on Omega’s October 5 closing price, which valued the total sale at about $500 million.
“Omega Protein has a 100-year history with an experienced and dedicated workforce, which we value, and a tradition of operating in small, coastal towns and communities that we share,” said Cooke chief executive Glenn Cooke. “Their focus on sustainable aquaculture and agriculture and the production of healthy food is a great fit with our experience and culture.”
Houston-headquartered Omega provides customers in the food and supplement industry with proteins, specialty oils and essential fatty acids that are added to foods. It operates a distinct unit dedicated to human nutrition offerings and among its key animal nutrition products are omega-3 rich fish oil, specialty fishmeal and organic fish solubles, all of which are added to feed for fish and pigs.
Founded in 1913, Omega maintains seven production facilities and has customers in more than 40 countries.
Cooke labelled the deal a “key strategic addition” and said Omega would be part of an effort to further diversify in the supply side of the global seafood business.
A spokesman for Cooke told Agri Investor that there will be no immediate change in Omega’s operations as the company takes time to access ways to integrate the operations.
“This acquisition is a good fit for Cooke as it will complement our feed and farming operations,” the spokesman said. “Cooke is continually exploring opportunities for diversification and enhancing our global seafood business.”
Omega representatives did not return messages seeking further detail by the time of publication.
On its second-quarter earnings call in late July, Omega president and chief executive Bret Scholtes stressed the long-term outlook of 10 percent compound annual growth rates for the aquaculture feed industry. His focus on the long term came in light of recent “soft pricing” he said had been brought on by a slower-than-average start to this year’s fishing season, which has necessitated a 25 percent reduction in production for its animal nutrition segment this year.
“These near-term volatilities are transitory in nature and macroeconomic and industry trends that continue to drive positive demand for our products give us confidence in long-term opportunities,” Scholtes said.