Icelandic salmon farmer Kaldvik announces deal to acquire key supply chain assets.
Icelandic salmon farming company Kaldvik has signed a non-binding letter of intent to acquire three key assets in its supply chain on Iceland’s east coast, aiming to enhance operational efficiency and strengthen its position in the industry.
The proposed acquisitions, detailed in a stock exchange announcement, target:
- Mossi: The owner of a property and facility in Djupivogur that houses Djupskel, a fish box manufacturer.
- Djupskel: A producer of packaging materials, including fish boxes, essential for transporting harvested salmon.
- Bulandstindur: A fish processing plant in Djupivogur, where salmon is prepared for market. Kaldvik already owns 67.7% of the facility and plans to acquire the remaining 33.3%.
These acquisitions, sourced from Heimstø, a company controlled by the Måsøval family, and Osnes, owned by Elis Gretarsson, will help Kaldvik achieve full control over its packaging and processing operations, according to CEO Roy-Tore Rikardsen.
Strategic Value
Rikardsen emphasized the benefits of vertical integration, stating, “This deal is expected to reduce the company’s packaging costs by approximately NOK 1.5 ($0.13/€0.13) per harvested kilo from the completion date. Additionally, it will secure 100% control over the Djupivogur processing plant, enabling further capacity and quality improvements in this segment of the value chain.”
By owning these assets outright, Kaldvik can streamline operations, reduce reliance on external suppliers, and increase flexibility in scaling up production.
Financial Terms
The acquisition, valued at NOK 190 million ($16.72 million/€15.96 million), will be settled as follows:
- Djupskel and Bulandstindur: NOK 150 million ($13.2 million/€12.6 million), paid in Kaldvik shares at an issue price of NOK 27.60 per share.
- Mossi: NOK 40 million ($3.5 million/€3.4 million), structured as an unsecured, interest-free seller credit loan due on December 31, 2025.
As of June 30, 2024, Mossi and Djupskel carried a combined net interest-bearing debt of NOK 89 million ($7.83 million/€7.48 million), which will be consolidated into Kaldvik’s accounts upon completion.
Broader Implications
The acquisition highlights Kaldvik’s strategy of strengthening its presence in Iceland’s salmon farming sector, where it has a growing footprint. By integrating processing and packaging into its operations, the company is better positioned to manage costs, improve margins, and ensure quality across its supply chain.
The transaction, expected to close in early 2025, remains subject to regulatory approval from Norway’s Competition Authority and customary closing conditions.
