Salmon industry’s biggest players swim around Atlantic Sapphire

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Atlantic Sapphire has its own salmon fry swimming in huge tanks in tropical Florida and this is attracting interest from salmon’s biggest guns.

SalmonBusiness knows that both SalMar (and Kverva, the majority shareholder of SalMar and Witzøe’s investment tool) owner Gustav Witzøe and CEO Helge Moen, as well as Mowi’s upper echelons Alf-Helge Aarskog and Ivan Vindheim, have been visiting Homestead, Florida, to take a closer look at Atlantic Sapphire’s groundbreaking land-based fish farms.

Witzøe in particular, according to sources not affiliated with Atlantic Sapphire, is said to have been very curious during his thorough inspection of the plant.

Direction
“This was probably a trip carried out in Kverva’s direction. I suggest that you direct your request to them,” wrote SalMar CFO Trond Tuvstein in an email to SalmonBusiness. Kverva has not yet responded to enquiries.

Read more: Fish are svisitedin Florida’s first salmon farm

Other aquaculture operators, including several Chilean fish farming companies, have already visited and others are following suit to catch a glimpse of Atlantic Sapphire’s massive production plant southwest of Miami.

Massive game changer
“We do not want to comment on who has visited us in Miami, but on a general basis I can say that over the past year we have had a lot of visitors that include customers, suppliers and industrial players,” said Atlantic Sapphire Johan E. Andreassen.

If Atlantic Sapphire succeeds in producing the planned 90,000 tonnes of salmon annually, at a competitive production cost, this will cover almost a quarter of this year’s total salmon consumption in the US. This will, of course, be a massive game changer in this market, and will be able to outperform imported airborne salmon from Europe and Chile. This will, in turn, affect price formation, earnings and the flow of salmon in the United States, but also in other and related markets.

However, the investment in Florida is subject to operational risk, and this is also reflected in the valuation of the company, which is characterised by a significant discount compared to ordinarily listed salmon farming companies.

Discount
While Mowi and SalMar are priced at EUR 9.7 billion and EUR 4.7 billion respectively, Atlantic Sapphire has a market capitalisation of EUR 600 million. According to Pareto Securities, Mowi and SalMar are valued11.6 and 11.6 times net profit in 2019.

Atlantic Sapphire is currently not in a profitable position and is priced exclusively on future expectations weighted with a moderate probability of success. But given the prospect of an annual production corresponding to half of that of SalMar, Atlantic Sapphire is still priced as an option.

The founder duo Johan E. Andreassen and Bjørn Vegard Løvik are the largest shareholders and control a total of 17 per cent of the shares in the company. Atlantic Sapphire is therefore wide open for a possible hostile acquisition.

Mowi has not yet responded to SalmonBusiness’ request for comment.