Premium, First Nations close CAD 1bn Clearwater acquisition

One of the largest seafood sector deals in recent memory has officially closed.

The CAD 1 billion ($788 million) buyout of Canadian shellfish harvester Clearwater Seafoods by Premium Brands Holdings and a coalition of First Nations is now complete, Clearwater said in a press release.

In January, 99.89% of Clearwater shareholders voted for the deal, which will see food group Premium and the coalition of Mi’kmaq First Nations’ joint venture, FNC Holdings, acquire Clearwater at CAD 8.25 a share. The MacDonald brothers Colin and Mickey as well as John Risley previously owned over 60% of the company collectively.

“We are very excited to have a world-class seafood company like Clearwater join our ecosystem,”said George Paleologou, president and CEO of Premium Brands, in a statement.

“The combination of its best-in-class management team, differentiated products and world renowned reputation for quality with our value-add expertise, brand development capabilities and extensive customer relationships in North America will strengthen Clearwater’s business and position it to accelerate its growth,” he said.

“We are also very pleased to be partnering with the Membertou, Miawpukek, Sipekne’katik, We’koqma’q, Potlotek, Pictou Landing and Paqtnkek communities. We all share a common longterm vision for Clearwater and its continuing development as a global leader in premium seafood,” said Paleologou.

“This is a signi cant achievement for the Mi’kmaq,” said chief Terry Paul of the Membertou First Nation. “Mi’kmaq not only become 50% owners of the company but expect to hold Clearwater’s Canadian fishing licenses within a fully Mi’kmaq owned partnership. This collective investment by First Nations in Clearwater represents the single largest investment in the seafood industry by any Indigenous group in Canada and transforms our participation in the commercial fishing sector providing more opportunities and prosperity for our communities,” said Paul.

The deal “positions us to continue building on the legacy of our founders, Colin MacDonald and John Risley, while we embark on the next chapter of a remarkable Atlantic Canadian success story”, said Ian Smith, CEO.

“I’m proud of this deal and con dent it will enhance the culture of diversity and sustainable seafood excellence that Clearwater is known for. I’m proud to turn over the legacy of the company in Atlantic Canada to new ownership and the existing management team,” said Colin MacDonald, who co-founded the company with Risley.

On Jan. 6, the deal received approval from Canadian competition regulators.

The acquisition was  rst announced on Nov. 9 last year, after Undercurrent News  rst reported the prospect in early October. On Nov. 3, Undercurrent reported Premium and the First Nations groups were in exclusive talks for an acquisition. The Membertou First Nation of Nova Scotia and Miawpukek First Nation of Newfoundland and Labrador are involved in the deal with Premium.

Membertou and Miawpukek take 50% through a new legal entity with Premium the other half. The Membertou and Miawpukek-owned entity will “acquire substantially all” of Clearwater’s Canadian seafood licenses. Also, Clearwater will maintain a perpetual license for using the seafood licenses, the companies said at the time.

Combined with Premium and the First Nations’ existing seafood operations, the new entity will have more than CAD 1.3bn in sales. Premium has been snapping up seafood companies in recent years, inking deals for the likes of Maine Coast Shell sh, Ready Brothers Seafood and, most recently, Toronto, Ontario-based Allseas Fisheries, one of the largest seafood distributors in the country.

To finance the transaction, Premium said it would raise CAD 250m. Around CAD 200m of this will come from a share offering with support from the banks Cormark Securities, BMO Capital Markets, CIBC Capital Markets, National Bank Financial and Scotiabank acting as joint bookrunners.

Antarctica Advisors and RBC Capital Markets advised Clearwater on the sale.