Young’s Seafood IS up for sale - owners confirm process has begun
26th April 2018
The owners of Grimsby-based Young’s Seafood have put the £500-million turnover giant up for sale.
Confirmation comes after intense speculation over winter, with Lion Capital having been involved for a decade, following a £1.1 million buy-out from Bidvest back in 2008.
Grimsby’s largest private employer, more than 1,500 people work directly for it at three factories and the Ross House head office in the town, scaling up with agency staff depending on the season.
It recently announced it is creating 200 more jobs to handle new Marks and Spencer contracts and further salmon processing it has proposed to move south as it seeks to close a plant in Annan, Scotland.
The operational changes are understood not to be affected by the start of the official sale process.
A spokesperson for the company said: “We have sent out notification that we intend to start a structured and open bidding process with all interested parties for the sale of the Young’s Seafood group.
“Young’s Seafood is the UK’s leading seafood supplier, with a 200 year heritage and a turnover of over £500 million. We aim to inspire people to love fish now and for generations to come.”
The formal notice came out of Luxembourg at 9am today, with the board of managers of the investment companies holding the shares, Lion Capital, Bain Capital and HPS Investment Partners, announcing they had established an “open bidding process with all interested parties for the acquisition of up to 100 percent of the shares” in Young’s.
No timeline has been issued, and creditors are to be kept informed, they said. It is not definite a sale will be concluded, it added.
While the business is operationally profitable, and back above the half-a-billion turnover target it enjoyed before losing major contracts with Sainsbury's in 2015, there has been concern about levels of debt. Recent years have seen rounds of consolidation to Grimsby, with factory closures elsewhere in England in 2012 and the Sainsbury's loss to Marine Harvest also seeing scores of lines head to North East Lincolnshire. That is again the plan for the Pinney's plant in Dumfries and Galloway, where 450 staff are currently employed, with Humberstone Road the likely beneficiary.
Back in January it was reported how Princes’ Japanese owner, Mitsubishi Corporation, was interested, with Young’s chief executing then telling how today’s confirmation would not be a surprise.
Bill Showalter, who was appointed from a group position after long-serving Pete Ward left the business in 2016, having completed the £500 million sale of the European arm of Findus to Birds Eye-owner Nomad, said: “I think it would not take a huge leap of faith for somebody to expect that at some point in the not too distant future the current owners of the company would look at what their strategic alternatives were.”
Three years ago the chief James Hill had told how flotation or sale to a larger seafood operator was a future possibility for the UK’s leading seafood brand.
Mitsubishi's Living Essentials division has a strong focus on seafood. With Cermaq Group AS it operates salmon farming businesses in key territories of Norway, Chile and Canada, and enjoys the second largest production output in the world. A next step along the supply chain, with a strong ambient brand, could be a strategic aim, as evidenced by Marine Harvest's move in Rosyth, which hit Ross House hard.
New owners will have an eye on Brexit, with movement of labour and seafood from Europe to the UK, key points of interest. Worst case scenarios have been painted of frozen production being lost here to eastern European countries, but the sheer scale of operations and the manufacturing and logistical excellence would be expensive to replicate. Grimsby is the gateway to the UK supermarket sector for seafood too, with 70 per cent of what is consumed in Britain handled in the town.
While the wet fish counters, chilled and frozen aisles of UK supermarkets are the main focus for Young's, it has just taken British provenance to the States, making a major splash in the US. As with all the branded products, it carries the iconic Dock Tower as part of a seascape image, and Europe and and Chinese markets have been mentioned.
Simon Dwyer, a key figure in the area's seafood cluster, said: "Young's seems to be in a good place in terms of the business overall. The recent announcement they have won the M&S business and that they are refocussing some of the production from elsewhere in to Grimsby can only be good.
"I think it is an attractive purchase. It is a business that is profitable and appears to have good contracts. It should be attractive for acquisition. It will be interesting to see where it ends up, seafood processing investment is a global business now."
News Courtesy: www.humberbusiness.com