Ontario Teacher’s Pension Plan Enters North American Shellfish Industry With Purchase of P.E.I’s Largest Mussel Producer
There is a new player in the Atlantic Canadian aquaculture industry — and it’s a big one.
On November 17, the Ontario Teacher’s Pension Plan (OTPP) announced that it had purchased Atlantic Aqua Farms, the largest mussel producer on Prince Edward Island and one of the largest in North America.
OTPP was founded in 1990 to manage the defined pension plan of Ontario’s 318,000 active and retired teachers and has net assets worth of $180 billion.
Having those kinds of resources in its corner is an exciting prospect for Atlantic Aqua Farms, said Terry Ennis, CEO of the company.
“We’re really looking forward to that. Teacher’s (Pension Plan) is a great organization. They have a great reputation; they’re big on environmental and social governance factors and that lines up nicely with our company,” he said.
“I think they’ll be a great fit and great long-term owner of this business. Good stewards and good corporate citizens here on P.E.I.”
Atlantic Aqua Farms employs about 200 people on P.E.I. and in other parts of its network out of province.
It operates two mussel processing plants, both on P.E.I., one in Orwell Cove and another in Borden-Carleton. It leases about 3,600 acres from the provincial government to grow its own mussels in various bays around the province, in addition to buying from smaller producers.
To date, all of its mussels come from waters around P.E.I. In addition to growing and processing mussels, the company also deals in a comparatively small amount of fresh oysters, clams and lobster. It sells its products under the brand names Canadian Cove, Confederation Cove and J.P.’s Shellfish.
Private, San Francisco-based, investment firm Encore Consumer Capital had previously owned Atlantic Aqua Farms.
There had been a number of companies interested in buying when Encore Consumer Capital put the company up for sale, but OTPP was the successful bidder.
Despite having a hugely diversified portfolio that stretches around the globe, Atlantic Aqua Farms is OTPP’s first foray into the aquaculture industry.
The pension fund is known for thinking long term and if you apply that reasoning to the future of this planet then it becomes pretty evident that aquaculture is a growth industry, said Andrew Claerhout, OTPP’s senior managing director of infrastructure and natural resources.
“Demand for protein is increasing, and in the context of land constraints and environmental considerations, aquaculture is among the most sustainable sources to meet this demand,” Claerhout said.
“Atlantic Aqua Farms has built a significant aquaculture platform, underscoring the significant opportunities for long-term growth in this space.”
“There is a good tail-wind behind the global aquaculture industry,” Ennis added.
“When you look, seafood wild capture supply has been fairly flat over the last 15 or 20 years, so as consumption grows, the aquaculture industry world-wide has got to step up to the plate to supply that growing demand. So, they liked our business, it’s in an area where they wanted to explore more opportunities and new acquisitions into the future, and we’re right here in their own backyard in P.E.I., really,” he said.
In practical terms though, it is unclear at this early stage what the acquisition will mean for Atlantic Aqua Farm’s future.
OTPP is still in the process of recruiting a new board to oversee the operation of its new business, so for the immediate future there is unlikely to be any major changes in the operations.
But, again thinking long-term, there are definitely areas of growth potential, Ennis said.
“Until we get a new board in place, there probably isn’t a whole lot I can say on that topic right now. Other than that, they certainly do want to continue to grow the business and invest in aquaculture in the future,” he said.
