Private equity group Bregal Partners is expected to cast a wide net in the sales process for Alaska pollock giant American Seafoods when it sends out its official prospectus in the coming weeks, a source familiar with the sales process told IntraFish.
The decision by Bregal's backers -- the Germany-based Brenninkmeijer family -- to close out the fund holding American Seafoods, as well as East Coast groundfish group Blue Harvest Fisheries, puts one of the world's most important whitefish harvesting companies on the block once again.
The M&A advisor on the sale, Lazard, has reportedly been directed to complete the sale by the end of the year, and top American Seafoods executives have been preparing for the formal process to begin over the past several weeks, the source told IntraFish.
Outgoing Bregal executive Scott Perekslis, who spearheaded repeated efforts to sell off American since Bregal first began looking to exit in 2019, recently launched an effort to raise a fund to acquire the group. It's unclear if any funding has been secured or who Perekslis has approached.
While Perekslis has been involved with the group in one form or another for the past two decades, the source told IntraFish that Bregal's owners will not be giving any particular favor to Perekslis' approach and are focused on divesting the company in a competitive process.
"Nobody has an edge," the executive said of Perekslis' bid. "They are going to be talking with a lot of potential bidders."
Perekslis has been involved with American Seafoods since Norwegian magnate Kjell Inge Rokke sold out of the group in 2000. That sale, which put the company into the hands of former CEO Bernt Bodal and other investors, was prompted by stipulations in new legislation requiring that foreign ownership in any US company holding fish quota be limited to 25 percent.
The foreign ownership cap slims down the pool of acquirees, as do limits on the amount of pollock fishing quota any single company can hold.
Trident Seafoods, for example, would be unable to take on American's directed quota since it would exceed its cap. Other companies in the At-Sea Processors Association -- companies that hold pollock fishing quotas -- could in theory be able to take on the additional catch.
There have been structures created in the past to legally accommodate quota cap limits through partnerships or spin-off companies, but those can be complex undertakings, and there would still be no guarantee they would pass regulatory scrutiny.
Bregal held advanced talks with several potential bidders following the 2019 announcement that it was seeking an exit, but none materialized. Among other reasons, the talks fell apart largely because the floor for the bids was considered too high by many buyers. Multiple industry sources have said the price tag quoted over the years was well over $1 billion.
A range of Pacific Northwest groups were approached, including Alaska Native corporations and community development quota (CDQ) groups. At one point, a multi-party bid between some of those groups was in the works but, again, failed to come through.
"The problem is you run out of available buyers in the fisheries sector pretty quickly," the source familiar with the sales process said, adding that outside some of the typical trade buyers in the seafood industry, "there are a lot more companies out there that could be interested."
Bregal has moved quickly in recent weeks to position itself for the sale, including changes in America Seafoods' board room. In addition to Perekslis' departure from Bregal, he also stepped down from the board. American Seafoods board members Amy Humphreys and Keith Decker also departed.
