TUF nets King Oscar from Norway

It was the second deal disclosed by TUF this month. The company, one of the world’s largest canned tuna packers and distributors, said on September 4 that it would acquire MerAlliance, a leading European smoked-salmon producer.

“We are in a full mode for investment. At this pace with our business expansion, I am confident we will hit our revenue target of US$8 billion by 2020 if not before,” Thiraphong Chansiri, president and CEO of TUF, said yesterday. 

“The deal will have a positive contribution to TUF’s earnings by increasing TUF’s group revenues by an estimated 2 per cent. It is a relatively small, but highly strategic acquisition for our group. It will give us a unique position and an opportunity to build the ‘King Oscar’ brand in the market worldwide and into our global brand portfolio.”

King Oscar Holding is owned by private equity fund Procuritas Capital Investors IV in the Nordic region.

Closing is subject to required regulatory approvals, which are expected next quarter.

King Oscar, No 1 in the premium sardine category in Norway, the US and Australia, posted sales of $80 million. Last year, its Ebitda (earnings before interest, tax, depreciation and amortisation) margin was about 12 per cent. 

As one of the leading canned fish suppliers in Norway, the US, Poland, Belgium and Australia, King Oscar has averaged growth of 6 per cent per year for the past five years. Headquartered in Bergen, the company runs two world-class plants in Gniewino, Poland and Svolvaer, Norway with a combined capacity of 135 million cans and workforce of 500 people, producing and selling 90 million cans per year in 16 markets globally. 

“Even after this transaction, our net debt-to-equity ratio of 0.8 time is still in a comfortable range. Our calculated direction for growth within the group’s six strategic business categories has become even stronger and more prevalent with this world-class brand acquisition.

“In addition to organic growth, mergers and acquisitions will continue to be the company’s key strategy for business expansion in both short and long terms,” he said.

‘King Oscar’s prestigious royal Norwegian heritage travels back in history of more than 140 years with special royal permission to use King Oscar II’s name and photo on a line of the company’s products. 

“King Oscar’s product range exclusively enhances the core strategic sardine category for TUF. The established facts for King Oscar encompass more than the quality of raw materials. These include the world’s best product sourcing from the Norwegian fjords, North Sea and Baltic Sea, backed by King Oscar’s solid footing in the brand. 

“We are not only acquiring the company’s valuable assets but its most prestigious heritage that comes with them. I cannot be more pleased that Thai Union has the honour to be part of such a heritage. 

“A brand of this nature with the royal identification and appreciation is not easily found or becomes available. I am delighted that the management team of King Oscar, with their long experience in these products and markets, has agreed to join the bench of Thai Union Group to help us develop this very unique branded business further over the next generations,” he said. 

TUF is reinforcing its global leadership position within the seafood industry with the purchase of one the world’s strongest brands like King Oscar. The unique products and its premium trademark present a great compliment to TUF’s existing portfolio of leading global brands – John West, Parmentier, Petit Navire, Mareblu, Chicken of the Sea and Sealect. 

The new partnership will significantly strengthen TUF’s brand presence in Scandinavia and its manufacturing footprint in Poland as one of the group’s state-of-the-art production hubs. 

“It is more than a phenomenon. Proven by King Oscar’s renowned success in the past, geographical expansion of a brand name of such value is not beyond doubt. Similar to our long-standing values, TUF is committed to take on King Oscar’s shared values on responsible sourcing, sustainable business conduct and protection of nature,” he said.

Geir-Arne Asnes, CEO of King Oscar, said that it was no exaggeration to say that with effective production and highly efficient infrastructure, well-invested world-class facilities and significant canned seafood manufacturing expertise, the companies are geared up for sustainable growth. 

“We share the same vision as TUF – a vision of technological advancement with an innovation and premium quality focus. By joining TUF, it is truly the moment for the expansive phase for the King Oscar brand worldwide.

“The acquisition is firmly in our target market of brand expansion and is uniquely synergistic to TUF’s strengths. Our expertise in significant canned seafood manufacturing should be beneficial to developing the next level of brand success globally. 

“We have a strong and loyal customer base that enjoys our premium seafood products. Now we will be part of one of the strongest seafood companies in the world. 

Sasinan Allmand, head of corporate communications for TUF, said there is an opportunity for the group to expand the sales of King Oscar to other countries in Europe, the US and Asia including Thailand, where consumers are more familiar with sardine than tuna products.

“It comes as part of our ‘String of Pearls’ strategy, which means we are not just looking for a ‘diamond’ but are also considering every small but strategic deal,” she said.