Peter Pan deal increases Alaskan fisheries ownership
One of Alaska’s largest fish processors is officially back home as part of a deal that makes it a “vertically integrated global seafood company,” according to the new owners.
The new Peter Pan Seafoods ownership group of McKinley Capital Management, RRG Capital Management and Rodger May of Seattle-based Northwest Fish Co. took control of the once Alaska-based fish company Jan. 1.
The new company merges Peter Pan’s commodity-based processing business with Northwest Fish’s expertise in fresh and value-added seafood processing and trading into one domestically owned company.
McKinley Capital CEO Rob Gillam said the transaction is the Anchorage-based private equity firm’s way of “betting on Alaska.”
For decades Peter Pan — founded in Dillingham — had been owned by the Japanese seafood giant Maruha Nichiro Corp.
“We’re excited about the Bristol Bay fishery. We’re excited about Peter Pan Seafoods and we’re excited about the acquisition,” Gillam said.
The new company’s vision is to “produce sustainable seafood for the benefit of oceans and people”; May and Gillam said in separate interviews that a major key to Peter Pan’s future success will be the company’s ability to adapt to changing markets because it is now a more complete, integrated fish processing and selling business.
“It’s not just about selling fish, it’s about the ability to adapt and tilt your selling operations towards demand,” Gillam said.
May, who leads the company’s operations, said the former Northwest Fish plants in the Puget Sound area will largely continue to operate as they have, processing fresh and value-added seafood for retail and food service customers.
In Alaska, they want things at Peter Pan’s plants in Dillingham, Port Moller, King Cove and Valdez to be much busier.
“The goal is to add more pounds to those plants and do more with those pounds in those plants,” May said.
The company’s headquarters will remain in Bellevue, Wash.
The specific terms of the deal aren’t being disclosed, but Gillam said his firm and Los Angeles.-based RRG Capital financed the acquisition in an equal partnership.
RRG’s expertise “is the dinner plate,” he described. “They do food, agri, water, seafood. That’s they’re specialty and specifically focused on sustainability of your dinner plate.”
Gillam, May and RRG co-founder Ari Swiller have known each other for years, which also helped the complex transaction come together, they said.
“We believe that sustainably managed, vertically integrated seafood companies are attractive investments and create environmental and social benefits,” Swiller said in a statement about the closing. “By focusing new Peter Pan on its customer and fleet services, we’re confident we can create tremendous value for our customers and our stakeholders.”
Gillam said one of the most fruitful ways create that value is to simply operate one’s plants more efficiently, which he believes will be possible with the workforce they have.
“We’re very fortunate to have inherited a great group of people,” he said.
Peter Pan representatives have already started working to improve the company’s relationship with its fishermen, according to Gillam.
Multiple Bristol Bay-area fishing industry representatives working said they are encouraged by what bringing a large processor under local control could mean for fishing in the region.
“We’ve made a massive outreach to the Alaska fleet to say, ‘hey, be blunt, let us know,’” Gillam said. “Fishermen are not known for their shyness so we’ve gotten a lot of good feedback.”
According to May, Peter Pan leaders have plans for significant growth over the next three-to-five years.
“It’ll benefit the fleet; it’ll benefit Alaskan workers. It’ll benefit local communities with more tax revenue,” May said.
Slightly more philosophically, he added that he believes avoiding further consolidation among Alaska processors will help the industry also help the industry as a whole.
“The simple fact that we were able to keep Peter Pan intact is huge,” May said.
Communities buy crab quota
With the help of local development groups, 30 Western Alaska communities have bought further into Bering Sea crab fisheries.
Bristol Bay Economic Development Corp. and Coastal Villages Region Fund announced a complex transaction in which 30 communities across the Bristol Bay and Yukon-Kuskowkim Delta regions purchased snow and red king crab quota valued at approximately $35 million from the Seattle-based Mariner Cos. that collectively totals about 3 percent of the total crab fishery.
As part of BBEDC’s role of the deal, the community development quota, or CDQ, group will increase its ownership share in Mariner crab vessels and take outright ownership of four of them.
“Owning boats quite frankly is a headache,” CEO Norm Van Vactor quipped, but he added that the benefit of the transaction for BBEDC is more crab available for its vessels that should make overall operations more efficient.
With the CDQs playing a facilitating role in what are really separate deals for each community to own quota, according to Van Vactor, the revenue from the crab fishery will flow directly back into local government coffers.
“There’s no middle man,” he said. “I hope the structure that we’ve put together actually makes this just a starting point. The infrastructure is there, if you will, is there now for communities to do more of this.”
Coastal Villages CEO Eric Deakin said the crab fishery revenue should help fund solutions to some of the critical issues in the region.
“Rural Alaska continues to face high poverty rates and lack of access to resources and there is a growing need for services in the Y-K Delta and Bristol Bay regions, which this deal will help address. We welcome a new generation of Alaskan owners and operators fishing in the Bering Sea and improving livelihoods here,” Deakin said.
Van Vactor emphasized that at its core the deal brings more of Western Alaska’s fisheries under local control because of the value of the deal.
“This wasn’t a grant or federal program; this was Alaskans through a competitive sales process buying back ownership to Alaska’s Bering Sea resource,” he said.
Elwood Brehmer can be reached at [email protected].