Attorneys Roland Sanchez-Medina Jr., Joseph Gomez and Michael Montiel can tell you a lot about corporate transactions, real estate, mergers and acquisitions, tax law — and now salmon farming.
The Sanchez-Medina, Gonzalez, Quesada, Lage, Gomez & Machado trio is well-versed with the fish after representing a Norwegian company that pioneered an inland fish-farming method.
The legal team helped secure an $86 million credit agreement for Atlantic Sapphire USA LLC, the U.S. subsidiary of Atlantic Sapphire AS, with most of the loan going to the construction of a salmon farm northwest of Homestead. The deal closed Feb. 19.
“I don’t think any of us were particularly familiar with fish farming before. They can hire me now,” Montiel joked. “I think we really learned a great deal about it.”
Atlantic Sapphire plans to open its first U.S. fish farm next year and its biggest one yet on 80 acres northwest of Southwest 272nd Street and 217th Avenue in unincorporated Miami-Dade County. The first phase will be a 390,000-square-foot farm producing 10,000 metric tons of salmon annually. That’s 22 million pounds a year.
“They actually recreate the natural environment of the salmon through these extremely large and sophisticated tank systems, where fish grow from eggs into adulthood, and they actually swim from tank to tank as they get older,” Montiel said. “It actually is coming out like a true salmon you would find in the ocean.”
Montiel is an associate, while Sanchez-Medina and Gomez are partners at the Coral Gables law firm.
Atlantic Sapphire’s method, trademarked as Bluehouse, is an alternative to traditional salmon farming where eggs hatched on land are moved to pens in chilly oceans, frequently off Norway and Chile, to grow to adulthood. This has led to problems, including contamination of farmed populations with sea lice and cases where the farmed salmon has escaped into the ocean.
Norwegians Johan Andreassen and Bjorn-Vegard Lovik, who are described as “salmon entrepreneurs” on the company’s website, started Atlantic Sapphire in 2010 and have a smaller facility in Denmark. The new farm will be a “commercial scale up” of the one in Hvide Sande, said Jose Prado, Atlantic Sapphire’s chief financial officer in Miami.
The $86 million financing breaks down to $54 million for construction, a $17 million bridge loan, an $11 million revolving credit facility for the Miami-Dade farm and $4 million in revolving credit for the Danish farm.
The bridge loan will cover costs between the completion of the first phase and a profitable operation since it will take time for the first generation of salmon to be raised. The Danish revolving credit is for expenses at the commercial pilot, and the U.S. revolving credit is for expenses other than construction.
Norwegian financial services group DNB ASA was the primary lender. EKF, Denmark’s export credit agency, partially guaranteed the construction portion.
The deal, much like salmon farming, was intricate. All conference calls, which sometimes would have about 15 attorneys in the U.S., Denmark and Norway, had to be done as early as 8 a.m.
“We quickly became morning people. I mean not only for calls but obviously to be awake and be ready and be cognizant,” Sanchez-Medina said.
SMGQ was one of the eight law firms that closed the deal in 45 days.
“I am not sure I’ve ever worked in a transaction that had to be signed, sealed and delivered this quickly with this complexity with so many moving parts,” Sanchez-Medina said.
The Miami-Dade site was chosen by Atlantic Sapphire after an expansive search in 14 states.
Atlantic Sapphire will use wells to draw saltwater from the Floridan Aquifer and freshwater from the Biscayne Aquifer.
“It’s just a high-quality clean water that would allow them to thrive. Salmon spend a portion of their life in fresh water and a portion of their life in saltwater,” Montiel said.
He and Sanchez-Medina also represented Atlantic Sapphire when it engaged a company for the wells and on the construction agreement. Gomez joined them to work on the credit agreement.
“I can’t imagine there’s a lot more people — not only in South Florida but certainly in Florida, maybe even the country — that know as much about salmon fish farming, just because we have been with them since day one,” Sanchez-Medina said.