High-tech companies react to being targeted by CageEye: “This is outrageous”

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Players such as Aquabyte, Stingray, Fluctus, JT Electric and Optoscale are among the acquisition targets on CageEye/Bluegrove’s short list.

Transaction-driven start-up CageEye is chasing EUR 39 million in new financing. A significant part of the money is being earmarked for new acquisitions. The company’s business plan, which SalmonBusiness has gained access to, gives an insight into which acquisition targets are sought.

Positioned
“Our technology platform, culture and business model is built for scale. Bluegrove is positioned to buy industry partners and bring them on to the Bluegrove platform. While each agreement must have its own strategic logic, the most important criterion is that target companies match our strategy for optimising sustainable aquaculture. The solutions can be used independently, but also show synergy as they offer all products, technology or data to contribute to the same goal.”

“A number of small third-party suppliers of new technologies are now present in the market – none of which are based on hydroacoustics. Bringing additional technologies to the CageEye platform will provide better tools and increased value for the salmon farmer,” the company wrote, illustrating possible acquisition targets with an overview of company logos:

Source: Bluegrove

Unexplainable
Among the companies mentioned is the laser specialist Stingray.

“We understand that some other supplier companies in the industry have become involved in incomprehensible transactions. We at Stingray were not aware that we were listed in such a prospectus or any business plan or similar until iLaks (SalmonBusiness’ sister site .ed) got in touch,” said Stingray Chief John A. Brevik.

“We know that many people are interested in our technology, both in Norway and internationally, which we consider to be a confirmation that we are developing the company and the Stingray system in a good way, but then it is only big players who knock on the door. Now there are probably several companies that have been dragged into this document unaware of both intent and plans at Bluegrove, but we are not going to speculate on that. What we can say, however, is that this is outrageous if a company with less annual sales in 2019 than what Stingray has on average every 14 days (through both 2018 and 2019) gives the impression that they can or will buy us up. We almost have to laugh a little bit at the whole thing,” he told SalmonBusiness.

“Stingray has traded for NOK 350 million (EUR 32 million) since its commercialisation in 2014/2015 and has driven the last two years with profits greater than CageEye’s total revenue from 2013 to 2019. We have patented technology in important salmon farming markets in the world and have developed a proven salmon farming method installed in hundreds of cages along the coast. We understand in this way that it can be exciting for others to build us up in such a context, but this has not been either requested nor clarified with us in any context.”

“If they can implement several of these plans, then I take off my hat to them and I hope at least hope that this adds value to the industry, both in the short and longer term,” said Breivik.

“Completely rootless in reality”
The underwater camera company Aquabyte, which is funded by US venture capital, is also mentioned in the overview. CEO Hans Runshaug has followed SalmonBusiness’ coverage of this case complex closely.

“The values they have put around themselves are totally frivolous. It was also interesting that Microsoft had to get on the pitch and explain the “contractual relationship,” said Runshaug.

“That they refer to Aquabyte as an acquisition candidate may well be up to them. However, it is completely rootless in reality and it would definitely not be in Aquabyte’s interest,” he added.

Collaboration
Feed barge supplier Fluctus has also been eyed up as a potential acquisition target.

“Fluctus is committed to having open/flexible systems so that the customer can choose to associate solutions from third parties according to their needs. CageEye was the first company we opened for back for in 2017 and we have had a good working relationship with them for several years,” CEO Harald Lien wrote in an email.

“We generally neither comment on other companies’ business plans nor acquisition rumours around Fluctus, but we wish CageEye the best in their efforts to contribute to the development of the industry,” he added.

Energy
In a shareholder letter from CageEye/Bluegrove, dated August 26, CEO Bendik Søvegjarto gave an enthusiastic expression of growth opportunities:

“Life is amazing in Bluegrove these days. We have so much energy and we want to see whether or not we are able to buy another company before the launch of B series. We have really seen the effect of growing both organically and with acquisitions, and with extreme focus on our commercial solutions and deliveries,” wrote Søvegjarto.

According to the aforementioned business plan, CageEye/Bluegrove has had dialogue with at least four unnamed companies, with annual turnover between EUR 1.5 and EUR 4 million each.

Targets. Source: Bluegrove