Commentary

See all articles

Are the tides right for Cooke to float?

Speculations over a public listing of the Canadian seafood giant have been running wild. And industry watchers agree: the time is ripe.

By now, everyone in the industry should know the name Cooke Aquaculture.

The Canadian company, which began as a small, family-owned salmon farming business in New Brunswick, has been a force unto itself in the last few years, closing several big acquisitions, with the Icicle Seafoods deal last year being the most notable one.

This came only shortly after the formation of a new subsidiary, Cooke USA in 2015, created as a vehicle to acquire shellfish harvester and processor Wanchese, the company’s first venture into US fisheries.

In 2014, it acquired of Marine Harvest's Meridian Salmon Farms, and also added Thompson Bros.' operations to its UK portfolio in 2015.

And there was no slowing down after it closed the Icicle deal in June 2016: In September Cooke bought UK salmon farmer Balta Island Seafare, and in December it finalized the deal to buy the assets of Uruguayan processor and harvester Fripur.

All these companies were added to the group network, which also includes the Spanish bass and bream operation Grupo Culmarex and its salmon subsidiary Cupquelan in Chile.

Today, the company is one of the largest farmed salmon, wild salmon, sea bass and shellfish suppliers in the world.

It's obvious when a company grows as fast as Cooke there will be rumors and speculation about its next move.

In the case of Cooke it mainly centers around one question: Will it or will it not seek public listing?

IntraFish reported on a potential planned initial public offering (IPO) a few years ago but nothing ever came of it.

But with a few more subsidiaries under its belt many in the industry believe the time is now ripe for this next step.

One investor source told IntraFish in January the company is definitely looking at an IPO -- and we believe the obvious choice would be the Oslo Stock Exchange.

I talked to several Norwegian analysts in the past few days, and while no one would confirm that Cooke is indeed seeking a listing, they all had one thing to say: "It would make sense."

Alexander Aukner, markets analyst at Norwegian bank DnB -- which advised Cooke on some previous deals -- told me Cooke "is a sizeable company, which fits in well in Oslo."

And while Cooke has a "different strategy" to the salmon-heavy Oslo-listed giants, Norway "is the right place to be" for an IPO.

Knut-Ivar Bakken, seafood analyst at Danske Bank Markets, agreed, telling me the timing for an IPO "would be very good right now."

Oslo Bors is the main seafood stock exchange in the world and "Cooke would find a lot of interest there."

Coupled with a strong outlook for the salmon market for another two years "at least" with expected further upsides it would make a great fit, he said.

I also asked Geir Harald Aase, communications manager at Oslo Bors, about it. He confirmed that there is interest from "many international seafood companies" to publicly list but declined to comment on "any dialogue with IPO candidates."

Unfortunately, I wasn't able to speak to a Cooke Aquaculture spokesperson. That's not surprising -- the company has been very coy about discussing financial matters publicly.

So "it would make sense", is the consensus.

On the other hand, Cooke's reported margins are so big it doesn't necessarily need fast cash. It had no problem getting financing for all its acquisitions so far.

But whatever it is we're going to see from Cooke in its next move -- it will certainly be well-thought-out and deliberate.

And that's one thing we don't need to speculate about.

Comments? Email me at elisabeth.fischer@intrafish.com

Twitter: EF_IntraFish

---

For more seafood news and updates, follow us on Facebook and Twitter or sign up for our daily newsletter.