Young’s Seafood is facing a battle with private equity houses from the UK and overseas for a chance to buy Saucy Fish Co owner Icelandic Seachill.
As first reported by The Grocer a fortnight ago, Seachill’s owner Icelandic Group last week confirmed it was putting the Grimsby-based processor up for sale.
It is understood Young’s is keen on a deal, and has been looking at the business for several months. However, several private equity operators are also believed to be interested, in addition to several global salmon and whitefish harvesting players.
A major stumbling block to a deal with Young’s would be the processor’s debt pile, according to industry and City sources, who noted reports earlier this month that Young’s faced an “uphill struggle” to cover its payment in kind notes, which could be as high as £220m by the time they mature in 2019.
While Young’s has played down concerns over its finances, sources warned of “huge challenges” for the processor in pushing a deal through and then having the funds to continue investing in the business.
Tesco, which signed a long-term partnership with Seachill last year, would also have to be convinced of the rationale for the deal.
However, others have noted that a resurgent Seachill could bolster a Young’s business that recently reported a fall in sales of almost £100m for its most recent financial year.
Seachill recently launched a new frozen Saucy Fish Co range in the UK and is expected to expand listings both among the mults and overseas in the coming months. This is seen by industry sources as a key driver of growth for the business post-sale.
Neither Young’s, Tesco nor Icelandic Seachill would comment when approached by The Grocer this week.
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