San Diego Business Journal

Ocean Garden Products, a San Diego distributor of shrimp and other seafood that is owned by Mexico's import-export bank, was sold in an auction process to a group of Mexican shrimp producers for about $25 million.

The sale to a consortium of three private firms based in Mexico's northwestern state of Sonora brings Ocean Garden full circle back to its roots. The company was launched in 1957 by a group of Sonoran fishermen who set up a distribution office in San Diego.

"In 1967, the company realized that the best way to sell their shrimp to U.S. customers was to set up a U.S. company," said Antonio Diaz, the president and chief executive officer of Ocean Garden.

The buyers of the company are expected to sign an official agreement Dec. 13 and complete the deal in February, Diaz said.

Plans by the buyers are to maintain the same direction the company has been going in the last three years, and continue growing market share, Diaz said.

The acquiring companies that were awarded Ocean Garden based on their sole bid are Acuicola Boca, Granjas AquaTech and Grupo Industrial Pesquero Mexicano, all top-producing seafood companies based in Sonora, according to the group's financial adviser, Rabobank International.

The price included $15.1 million in cash and the assumption of about $10 million in outstanding debt. The auction process set up by the government attracted three final qualified bidders, but in the end only one group submitted a bid.

"This sale will unlock the growth potential of Ocean Garden Products and greatly improve its competitive position in the U.S. and Mexican markets," said Jesus Lopez Borquez, a senior banker for Rabobank.

Big Piece Of The Market

With sales of about $250 million this year, Ocean Garden has about a quarter of the Mexican shrimp market. Diaz said the company hasn't been profitable for the past three years.

"The company was set up as a nonprofit, so we had to clean up a lot of things," he said. "We're trying to make this a more transparent company."

In the late 1990s, Ocean Garden reported sales in excess of $350 million on some 55 million pounds of shrimp. This year, the company should sell about 40 million pounds.

Diaz said a large reason for the drop-off was a 40 percent decline worldwide in the price of shrimp. That is largely due to a shift to producing more shrimp through aquaculture farms. This year, about 60 percent of the company's shrimp comes from farms, and the remainder is caught in the wild.

Ocean Garden has about 190 employees, including 70 working at the company's headquarters in Kearny Mesa.