New Zealand Coastal Seafoods (ASX: NZS) has agreed to acquire 100% of the issued share capital of Kiwi Dreams International (KDI), providing it with immediate access to the country’s lucrative and value-added pharmaceutical ingredient sector.
Established in 2018, KDI develops nutraceutical products and services including ingredient supply, quality and validation, as well as formulation development.
On settlement of the acquisition, New Zealand Coastal Seafoods will gain access to KDI’s key suppliers, clients and technical intellectual property.
Under the agreement, KDI managing director Tony Dowd will be contracted to New Zealand Coastal Seafoods for a minimum one day per week over a 12-month period for the purpose of developing potential high-value products including mussel powder and oils; marine-based collagens including dried ling maw and fish skin; seaweed extracts such as fucoxanthin; and oyster powder.
The acquisition follows the development of New Zealand Coastal Seafoods’ collagen dried ling maw-based nutraceutical product, and will help the company recognise significant opportunities in a high-growth global market estimated in 2018 to be worth approximately $348 billion.
New Zealand Coastal Seafoods chief executive officer Andrew Peti said it reflects the company’s strategy of expanding revenue streams by adding greater depth to its product line.
“This acquisition is an important step in [our] expansion strategy as it will provide vertical integration with a nutraceutical ingredient developer and supplier,” he said.
“[We have] recently recognised significant opportunities in the nutraceutical market which we wish to capitalise on [and we believe] KDI’s key suppliers and intellectual property, coupled with a well-defined product development schedule, will help us expand into the global market.”
Under the terms of the acquisition, New Zealand Coastal Seafoods will issue 16 million ordinary fully paid shares to KDI shareholders which will be subject to voluntary escrow for a period of 12 months from issue.
New Zealand Coastal Seafoods
New Zealand Coastal Seafoods processes, distributes and exports premium seafood products for supply to customers, restaurants, seafood traders, supermarkets and other retailers in New Zealand, Australia and Asia.
To date, the company has focused on selling premium processed seafood for Asian consumers including dried ling fish (maw), sea cucumber, soft and hard elephant fish (backbone) and dog fish (backbone).
It operates a seafood processing and drying facility in Christchurch with a current annual production capacity of 60 tonnes of raw seafood products input.