New Zealand King Salmon IPO Confirmed

Following a successful bookbuild process, the world’s largest aquaculture producer of King salmon today (23 September) lodged its Product Disclosure Statement (“PDS”) for an initial public offer of 69.2 million ordinary shares (the “Offer”). 

$30.0 million in new capital is being sought to repay debt, to fund future investment and for working capital.

As part of the IPO, existing investor Direct Capital is selling up to $45.0 million of shares in the Offer (with Direct Capital’s remaining shares to be transferred to, or held by a custodian on behalf of, certain persons on whose behalf those shares are currently held, including New Zealand King Salmon directors John Ryder and Mark Hutton). 

Major shareholder Oregon Group is reducing its shareholding to approximately 40 per cent, selling down $0.8 million of shares in the Offer, while other existing minority shareholders are selling up to $1.7 million of shares in aggregate. 

New Zealand King Salmon intends to list on both the NZX Main Board and the ASX in October 2016. Based on the $1.12 price per share, the company’s market capitalisation will be $154.5 million, assuming the Offer is fully subscribed and excluding certain shares to be offered under an employee share ownership plan. 

The PDS and link to the Register Entry containing additional material information about the Offer is available at www.shareoffer.co.nz/newzealandkingsalmon. 

Company chairman John Ryder says the Offer has received strong support from investors:

“Naturally we are delighted New Zealand investors have demonstrated strong support for the initial public offering with demand exceeding the size of the Offer at the final share price.

The confirmed continuing involvement of major shareholders Oregon Group and others reflects their ongoing support for New Zealand King Salmon and their desire to remain invested in the company alongside new investors.”

Mr Ryder says shares have been allocated to institutions in New Zealand, Australia and Hong Kong, local Marlborough and Nelson Bays iwi, as well as a number of brokers on behalf of their New Zealand resident clients. A Priority Offer (as defined in the PDS) of $1.5 million of shares is available to eligible residents in the Marlborough and Nelson Bays regions.

New Zealand King Salmon operates under three key brands: Ora King, Regal and Southern Ocean. The company controls all elements of the value chain from breeding and growing to harvesting and processing, and has been selling salmon to consumers and chefs for more than 30 years.

It owns and operates eight seafarms in the Marlborough Sounds, harvesting and processing more than 6,000 MT of King salmon a year. Three new seafarms consented in 2014 are expected to enable the company to approximately double annual production over time.

The New Zealand salmon farming industry has been recognised as a global leader in sustainable seafood following New Zealand’s ‘Best Choice’ accreditation in 2015 in the Monterey Bay Aquarium’s globally respected consumer guide Seafood Watch.

In respect of the financial year to 30 June 2017, New Zealand King Salmon is forecast to generate revenues of $130.1 million and pro forma operating EBITDA of $19.2 million.

New Zealand King Salmon is expecting to declare dividends of $5.0 million for the 2017 financial year, or 50 per cent of forecast pro forma operating net profit after tax, and $5.6 million in 2018. It anticipates dividends will be fully imputed.