July 24, 2017

Newly launched Norwegian private equity firm Summa Equity has made its first seafood investment, acquiring a 75 percent stake in Milarex, a value-added salmon processing company located in Slupsk, Poland, for an undisclosed amount.

Launched last spring, Summa Equity was founded by Raynir Indahl, formerly of Altor, and Johannes Lien and Jenny Keisu, formerly with Nordic Capital, along with Christian Melby and Tommi Unkuri.

The new group was initially looking to raise €300 million (US$350 million) to be deployed through equity tickets of between €20 million to €50 million (US$23 million – US$58 million) under a classic buyout structure. However, the firm ended up closing its debut fund, Summa Equity Fund I, oversubscribed at SEK4.5 billion (US$550 million) in February of this year.

Investors in the fund have included a wide range of endowments, foundations, pension funds, insurance firms, and funds of funds based across North America, Europe, and the Nordic region.

Moving forward, Fund I will invest under a “Resource Scarcity” theme – targeting tech-enabled companies that have growth in excess of the general economy, and that answer the challenges associated with demographic shifts, resource scarcity, or energy efficiency. The team sees an aging demographic in the West, global population growth, climate change, and lower expectations for growth by the IMF and World Bank as directing its strong ESG (environmental, social, and governance) focus, and as drivers for successful return on investment within its chosen niche investment categories.

“With a growing global population amidst global climate issues, the world needs healthy and sustainable food, and these megatrends are driving the growth in seafood consumption,” said Reynir Indahl, managing partner of Summa Equity, “Wild catch of fish is leveling off and we expect fish farming to surpass it by 2019. Salmon farming uses no fresh water, has a high feed conversion ratio, is healthier than meat and barely produces CO2. Although there are environmental issues, as with most food production, the industry is young and innovation and regulation in Norway are rapidly improving the sustainability of salmon farming.”

Milarex, which began operations in 2016, was founded by Jerzy Malek, Polish entrepreneur and founder of Morpol – the largest salmon processor in the world. The site produces smoked salmon and other seafood products which are distributed to European markets, predominantly Germany, Poland, and Italy. Its factory has a current capacity of 5,500 tons but has the ability to expand output to 30,000 tons. Due to the company’s flexibility, scale, and technological integration, the company has been profitable since its launch and expects to see revenue of €100 million this year.

“In a fragmented industry where capacity additions have been limited relative to demand, Milarex has built one of the largest and most efficient processing factories and quickly gained a strong European market position,” says Joakim S. Johansen, investment manager at Summa Equity.

This investment is Summa’s first in seafood, but fourth overall to date from Fund I, which already includes Sortera, a recycling business; eGain, a provider of climate-based and remote heating systems for apartment buildings; and Lin Education, a Swedish edtech company.

For Milarex, Summa is anticipating making substantial investments to position the company to be the global leader in its space. The company’s main office will be moved to Oslo, Norway, as Norway is the leading producer of salmon in the world, and Malek will continue on the company’s Board of Directors while retaining a 25 percent stake in the operation.

“The investment from Summa Equity will enable Milarex to grow rapidly in Europe and beyond. My former experience with Hindar and Indahl from Summa, and the discussions we’ve had over the last year, convinced me that they are the right partner to develop Milarex,” says Jerzy Malek, founder and CEO of Milarex.

Additionally, Undercurrent News reports that Jon Hindar, former CEO of Cermaq Group, will assume the role of Chairman of the Board for Milarex.

“Jerzy Malek, the man who developed the German smoked salmon market and created Morpol, is an institution in the world of salmon,” said Jon Hindar, Summa Equity’s industrial advisor, the former CEO of Cermaq, and the new chairman of the board of Milarex. “Yet again, he proves his ability to create a leading player. The technology and know-how his organization has developed is a tremendous asset to Milarex. It is a privilege to be working with him and his team.”

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.