Private equity-backed Greek seabass and seabream player rebranded as "Philosofish'" to go head-to-head with rival Andromeda.
Philosofish, formerly known as G&P Bitsakos Aquaculture, recently acquired new production units to boost it capacity fourfold to 16,000 metric tons. This puts the Diorasis-backed company right under Andromeda in terms of capacity and market share.
Andromeda acquired majority stakes in the two Greek seabass and seabream movers Nireus and Selonda in October, providing the company with an important position in the dynamic European aquaculture market.
Diroasis, parent of Philosofish, acquired farming concessions from Nireus and Selonda for a reported €50 million ($55.4 million), as part of the European Commission's competition authority requirements to allow for the double acquisition by private equity firm Amerra.
The seabass and seabream sector has been struggling with oversupply and low prices in European markets.
"In addition to deal fatigue, morale at Nireus and Selonda is low after years of uncertainty about the outcome of the sales process," a source in the industry told IntraFish.
"Jobs now hang in the balance and the new owners are migrating most of the corporate functions away from Greece to Spain."
Selonda's revenues fell 7 percent in the first half of 2019 compared to the same period last year, to €73.5 million ($80.5 million), mainly due to declining prices.
The trend has similarly impacted Nireus. The group more than doubled its losses from last year to €12.3 million ($13.5 million) in the first half of 2019 compared to 2018.
"The sustained slump in prices has further put the two companies under immense financial pressure, with Selonda teetering on the verge of bankruptcy," another industry source said.
In addition to that, buyers who had been buying their fish from the three different suppliers may now have to place all their eggs in one basket because the three companies merged, the source explained.
"The new owners will have their work cut out for them to right-size operations and integrate assets across a number of different sites, migrate management to another country being Spain, merge three corporate cultures of erstwhile rival companies, and fixing their balance sheet," the industry source said.
As a result, Diorasis-backed Philosofish is primed to become an alternative supplier for the exposed buyers, the source said.