NTS ASA

NTS ASA was a major Norwegian integrated aquaculture group. Think of it as a one-stop-shop for salmon. Not only did it farm and harvest delicious Atlantic salmon through its key subsidiaries like Norway Royal Salmon (NRS) and SalmoNor, but it also owned and operated a massive fleet of specialized boats to service the industry. Through its majority stake in Frøy ASA, NTS controlled a fleet of wellboats (essentially floating fish hospitals and transport vehicles) and service vessels crucial for the day-to-day operations of fish farms along the rugged Norwegian coast. This combination of fish production and essential marine services made it a unique and powerful player. However, NTS is perhaps most famous among investors not for its salmon, but for the intense bidding war it sparked in 2022, which saw some of the biggest names in the industry fight for control. This corporate drama ultimately led to its acquisition by SalMar ASA, providing a fantastic real-world lesson in how hidden value can be unlocked in the stock market.

NTS's strength came from its two complementary business segments, which together formed a powerful, vertically integrated operation. This structure provided both operational efficiencies and a diversified revenue stream.

This was the heart of the business. NTS, primarily through its stakes in NRS and SalmoNor, was a significant producer of Atlantic salmon. Its core assets were not just the fish in the sea, but the licenses required to farm them.

• Farming Licenses: In a highly regulated industry like Norwegian salmon farming, the government-issued licenses to operate are incredibly valuable. They are limited in number, acting as a significant barrier to entry for new competitors. NTS controlled a substantial portfolio of these licenses, representing a huge, tangible asset on its balance sheet.
• Geographic Spread: Its operations were strategically located in some of the best salmon-farming regions in both Norway and Iceland, giving it access to ideal sea conditions and established infrastructure.

This is what made NTS stand out from a pure fish farmer. The wellboat and service vessel business, operated through the publicly-listed Frøy ASA, is a high-tech logistics and marine services operation.

• Critical Infrastructure: These vessels are not just simple boats. They are advanced, mobile platforms used for crucial tasks like treating fish for diseases, sorting them by size, and transporting them live and unharmed from sea farms to processing plants.
• Stable, Contract-Based Revenue: This segment provided a steady, often long-term, contract-based revenue stream that was less volatile than fluctuating salmon prices, adding a layer of stability to the overall business.

The story of NTS's acquisition is a must-read for any student of value investing. It perfectly illustrates how a company trading below its intrinsic worth can become a target, unlocking immense value for its shareholders in the process.

In early 2022, Mowi, the world's largest salmon farmer, launched a Takeover Bid for NTS. However, a key group of NTS shareholders, including the company's founders, believed the offer significantly undervalued the company. They argued that the market was not fully appreciating the combined worth of the farming licenses and the modern, market-leading Frøy fleet. In a bold move, this shareholder group teamed up to launch a rival offer to take the company private themselves.

Seeing a strategic opportunity to consolidate the industry and acquire a world-class portfolio of assets, another Norwegian giant, SalMar ASA, entered the fray. They presented a more attractive offer, a mix of cash and SalMar shares, which ultimately won the support of the NTS board and a majority of shareholders. This triggered a classic corporate auction, with each bidder forced to reveal how much they truly valued NTS's unique combination of assets. The intense competition drove the final acquisition price far above where NTS stock had been trading just months earlier.

SalMar's successful acquisition of NTS created an aquaculture powerhouse. For value investors, the NTS saga is a masterclass in several key principles:

• Hidden Value: It demonstrates the importance of looking beyond a company's headline earnings and trying to understand the true value of its individual parts.
• Sum-of-the-Parts: A Sum-of-the-Parts (SOTP) Valuation would have clearly shown that NTS was worth significantly more than its market price suggested. The takeover was the catalyst that forced the market to recognize this reality.
• Buy Assets, Not Just Stocks: The core lesson is to find companies with high-quality, hard-to-replicate assets (like farming licenses and specialized fleets) that are being overlooked. This is a classic value investing strategy: buy a dollar's worth of assets for fifty cents.

The story of NTS ASA is more than just a fish tale. It's a perfect illustration of how corporate Mergers and Acquisitions (M&A) can act as a powerful trigger for unlocking shareholder value. It teaches us that sometimes, the most attractive investments are companies with distinct, high-quality business segments that are either misunderstood or undervalued by the wider market. By spotting a company whose parts are clearly worth more than its current stock market price, an investor can position themselves for significant gains when an event like a takeover bid brings that hidden value into the spotlight. NTS may no longer trade on the stock exchange, but the lessons from its final chapter are timeless for any aspiring value investor.