Source: PRNewswire
Umami Sustainable Seafood, Inc. today announced that its Board of Directors has decided to move forward and complete the acquisition of Baja Aquafarms ("Baja"), a leading producer of bluefin tuna based in Mexico.
As reported in July 2010 the Company acquired a 33% interest in Baja. The Board of Directors has now decided to exercise its option to acquire the balance of the shares in Baja, with closing scheduled to take place by November 30, 2010. Under the terms of the acquisition agreement, as amended, the total purchase price for 100% of Baja is $28 million in a combination of cash and stock (of which $8 million has been paid to date), together with various working capital advances to be made to Baja by the Company through the application of proceeds of inventory sales during the balance of the year.
In announcing the revised agreements, Oli Steindorsson, Chairman of the Company stated; "I am very pleased that our Board and that of Baja, have decided to move forward for Umami to complete the acquisition of 100% of Baja which is the leading bluefin tuna operation in Mexico. Completion of this acquisition would represent a key step in our strategy of becoming the world's leading producer of bluefin tuna. Coming off the back of very successful fishing seasons in both our Croatian and Mexican operations, we are in a situation of being well stocked with inventory at a time of sharply rising prices due to a combination of factors, including increasing global demand for quality sushi and sashimi."
Mr. Steindorsson continued: "Against the background of our recent expansion and continuing improvements in our existing operations, we believe that our financial performance will be significantly enhanced by our combination with Baja, particularly given the synergy to be derived from rationalization and consolidation of our marketing and distribution. Baja is a company with whom we are very familiar and their management team has done a superb job in developing a world-class bluefin farming operation. Following the acquisition of Baja and on a combined basis, we believe that Umami will account for over 20% of the global market for farmed bluefin tuna, which will elevate the operating scope of our well refined, sustainable production platform and should enable us to have a meaningful impact on efforts to normalize the global supply of bluefin which has historically suffered from overfishing. We are also continually looking at ways to improve our efficiency, particularly with respect to rationalization of our sales and marketing and creation of a standardized 'UMAMI' marketing and distribution platform for our products sold both in Japan and other key markets globally."
Mr. Steindorsson concluded: "We continue to develop and refine our farming and feeding technologies to further reduce our cost per kilo of farmed fish, already one of the most efficient in the industry, and will continue to focus on increasing the profitability of our operations. Most importantly, we will enhance our efforts in research and development of captive breeding (closed cycle) technology so that, ultimately, we can ensure that supplies of this valuable resource are maintained and the bluefin retains its position at the top of the marine food chain."
For additional details regarding the terms of this transaction, please review the Company's Current Report on Form 8-K to be filed with the Securities and Exchange Commission.