AUCKLAND, NZ: New Zealand Coastal Seafoods Limited (ASX:NZS) has entered into a binding share purchase agreement with PXYY Pty Ltd and Nine Ocean Fishery Pty Ltd and Investment Advisers Alliance Pty Limited to acquire 100% Nine Ocean Group.

It is a condition precedent of the transaction that the company also enters into a share purchase agreement to acquire 100% of the issued share capital of Meridian Equity Pty Ltd, a related entity of Nine Ocean, for nil consideration.

Nine Ocean is a leading seafood fishing and wholesale export business headquartered in Cairns, Queensland with operations in the Torres Strait.

The proposed transaction will provide New Zealand Coastal Seafoods with a number of strategic benefits, including an Australian based operation with established revenue channels, advanced supply chain and logistics networks, processing optimisation opportunities and additional warehousing capacity.

New Zealand Coastal Seafoods is confident that the synergies between the two operations and the capital it will bring to Nine Oceans will drive increasing growth and assist in further scaling Nine Ocean’s operations in the near term.

Established in 2017, Nine Ocean is a seafood fishing and wholesale/export company, with a core strategic focus on responsible sourcing. Headquartered in Cairns, Nine Ocean sources its seafood products from the Torres Strait and operates a purpose-built export standard processing facility in Cairns.

Through sustainable management practices, Nine Ocean cultivates a variety of high-end seafood products, with a particular focus on tropical rock lobster and sea cucumber. Nine Ocean owns a series of unique fishing licences in the Torres Strait and Coral Sea Fishing Zones.

Nine Ocean products are wild and traceable, the fishery has been assessed and verified for sustainability, taking into account impacts on the wild fish population and the broader coastal ecosystem where Nine Ocean conducts its fishing operations.

Nice Ocean is a direct supplier of premium fresh and frozen seafood products to outlets across Australia, and also serves the Asia-Pacific markets via an airport-to-airport shipping capability.

The company’s processing facility in Cairns includes live tanks, frozen/chilled storage and drying equipment for live, frozen/chilled and dried seafood products. For international markets, Nine Ocean provides a full set of accredited export documents to assist global clients with customs/import requirements.

The group has a strong ESG focus. All of Nine Ocean’s operations adhere to Australian Fisheries Management Authority (AFMA) guidelines as well as relevant Protected Zone Joint Authority (PZJA) based rules and policies. Nine Ocean is also focused on local community engagement and supplies a range of administrative services and equipment to the community.

New Zealand Coastal Seafoods CEO, Andrew Peti, said: “The proposed acquisition of Nine Ocean marks a unique opportunity to further establish NZCS as a leading producer of premium seafood products across Australia and New Zealand.

“Nine Ocean’s business model operates in strong alignment with NZCS’ current strategy, further leveraging its position as a preferred supplier of ethically sourced, high-quality seafood products, particularly for large Asian consumer markets. During our initial due diligence, the Company has identified a number of synergies and opportunities to drive growth. We also plan to commit capital and the existing management team’s experience to scale Nine Ocean’s operations for the benefit of NZCS.

“In addition, the proposed transaction terms offer compelling value for NZCS shareholders, with the opportunity to acquire a leading domestic seafood company at an attractive multiple of FY21 and FY22 unaudited revenues. Taking those factors into account, the NZCS management team views the proposed transaction as a transformational acquisition for the business, with the capacity to add materially to long-term revenue and net profits.”