Santa Monica Seafood seeks merger, acquisition opportunities after record sales

After record sales in 2021, Santa Monica Seafood executives are considering merger and acquisition opportunities, Roger O’Brien, president and CEO of SMS, told SeafoodSource.

The Rancho Dominguez, Calif., Seafood processor, distributor, retailer and coffee shop operator has “never stopped getting involved in M&A activity,” said O’Brien.

“Without the start of the pandemic in early 2020, we would likely have completed a major acquisition that was underway at the time,” he said.

In 2021, the company actively pursued three merger and acquisition transactions, but ultimately chose not to go ahead with the deals.

Now, SMS executives are exploring two merger and acquisition options “and we hope we can close at least one of them this year,” said O’Brien. “We continue to look for strong growth opportunities, particularly geographically, but we will not close a deal if we believe we have not properly addressed all of the risks.”

Last year, SMS achieved the highest turnover in the company’s history.

“Foodservice sales picked up again in March and continued to grow throughout the year,” said O’Brien.

Fourth quarter sales reached nearly $ 600 million and, according to O’Brien, December saw SMS have the highest monthly sales in the company’s history.

Sales increases are due to both the rise in the retail and hospitality business and the strong sales in the O’Brien skin pack division. traced back said SeafoodSource last May.

In December 2020 SMS bought up the equity stake in a joint venture that controls Ethos Seafood Group, a manufacturer of prepackaged, chilled fish products that are sold in retail stores across the country.

Ethos Seafood, founded in 2012 as a joint venture between Santa Monica Seafood and Blue Earth Group, is now wholly owned by Santa Monica Seafood and is considered a division of the company. The name Ethos Seafood was phased out as the group becomes the value-added products division of Santa Monica Seafood.

Revenue in this division increased 45 percent in 2020 and 32 percent in the first quarter of 2021 compared to the first quarter of 2020.

In addition, SMS doubled the size of its Illinois operations last year from approximately 26,000 to 50,000 square feet, which “has been a major contributor to increasing our revenue at this location,” said O’Brien.

“We currently have tremendous momentum from 2021 and expect significant organic growth in 2022,” he added.

The company has come a long way since the pandemic began when restaurant closings prevented some of its food service customers from paying their bills, O’Brien said SeafoodSource last May. SMS was forced around 25 workers laid off, but kept more than 750 employees, according to O’Brien.

As much as supply chain and labor problems plagued the food industry, SNS “weathered all of these storms remarkably well in 2021,” said O’Brien.

“We ‘ve bitten the bullet in 2021 on wage issues and believe we will reap the benefits with improved employee loyalty and retention in 2022,” said O’Brien.

The supplier has also started using more of its own vehicles and drivers in order to be less dependent on external freight forwarders.

“However, this makes us more dependent on hiring enough drivers and while this has been and likely will continue to be a problem, we’ve done quite well in that area,” said O’Brien.

While the company has no direct influence on supply chain problems, SMS’s purchasing power has “allowed us to source products when other fishmongers couldn’t,” said O’Brien. “This and our excellent supplier relationships, coupled with an increase in purchasing contracts with important suppliers, should give us more tools to combat supply chain problems.”

Still, O’Brien expects transportation, supply chain and labor issues to continue to plague the industry this year, driving up the company’s spending.

Photo courtesy Santa Monica Seafood

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