SEAFOODNEWS.COM — December 19, 2014 — The Thai Union Group, led by CEO Thiraphong Chansiri, has made the largest acquisition in its history, as it emerged as the winner in the sale of Bumble Bee Seafoods by Lion Capital. TUF will pay $1.5 billion.
Bumble Bee has annual sales of about $1 billion, and an estimated EBITDA $145 million. The sale represents a value of 8.6 times EBITDA.
Thiraphong, speaking to reporters in Bangkok, said the acquisition will boost TUF's revenue over $5 billion in 2015, and puts the company on track to reach its goal of $8 billion in sales by 2020.
TUF has made a string of acquisitions, and even before the Bumble Bee purchase, was the largest tuna canner in the world. TUF is the owner of Chicken of the Sea tuna, the third of the three main tuna brands in the U.S. Combined with Bumble Bee, TUF will be the largest player, surpassing Dongwon's Starkist.
TUF also bought European canner John West four years ago, and this year purchased King Oscar sardines, and French salmon smoker MerAlliance.
Thiraphong said the sale, financed by a bridge loan from Thai banks, will result in the need for the company to reduce debt. Its debt to asset ratio will rise to 2.0, which is higher than its target.
Analysts also say that some sale of assets of Bumble Bee is likely to be required by US anti-trust regulators, although Thiraphong said they do not expect any regulatory hurdles to completing the transaction.
The sale will be finalized in the second half of next year.
Thai Union has been very active as a founding member of the ISSF – the International Seafood Sustainability Foundation, and is a member of the UN Global Compact, and a recognized member of Dow Jones Sustainability Indices (DJSI) Emerging Markets 2014 – the first and only Thai company in the food products sector to be awarded. Chris Lischewski, CEO of Bumble Bee, said that he was pleased that Thai Union would continue the company's committment to responsibly sourcing seafood, and supporting sustainability initiatives.
The purchase is for 100% of the shares of Bumble Bee from Lion Capital.
Once the transaction is finalized, TUF and Bumble Bee will focus on enhancing operating efficiencies for material sourcing and production, innovation, and new product development, primarily in North American markets.
"I have always believed that Bumble Bee and Thai Union share a strong vision for innovation, operational excellence, sustainability and value for our consumers, making this combination good news for customers, consumers and the industry as a whole," said Chris Lischewski, President and CEO of Bumble Bee Seafoods. "Importantly, we commit to uphold the indispensable role as one of the world's leaders in providing responsibly harvested and processed seafood."
"The deal is the largest acquisition in the history of our company and one of the most exciting external growth propositions," Thiraphong told reporters on Friday.
According to Reuters, Thiraphong, 49, is the eldest son of Thai Union co-founder and chairman Kraison Chansiri, and took over as president when he was 30.
Kraisorn was born in Guangdong province, China, and started the business 37 years ago with a tuna cannery in the Thai province of Samut Sakhon, southeast of Bangkok. Tuna now makes up 47 percent of sales, with shrimp 24 percent and the rest from sardines, salmon, pet food and other products.
This story originally appeared on Seafood.com, a subscription site. It is reprinted with permission.