High Liner Foods has entered into a definitive purchase arrangement agreement with Umios Corporation and 4856442 Nova Scotia Limited, a newly formed, wholly owned subsidiary of Umios incorporated in Nova Scotia. Under terms of the agreement, the buyer will acquire all of the Lunenburg, N.S., Canada-headquartered company’s issued and outstanding common stock for C$27.00 per share in cash, subject to required approvals and other closing conditions.
The consideration represents a premium of approximately 79% to the closing price of the shares on the Toronto Stock Exchange on October 23, and 86% to their 20-day volume-weighted average price for the period ending on that date. The deal values the frozen seafood company at approximately C$804 million on a fully diluted equity basis and C$1.25 billion on an enterprise value basis.Upon completion of the transaction the company will repay in full its outstanding credit facilities.
Umios, a Japanese seafood giant formerly doing business as Maruha Nichiro, is one of the world’s largest seafood and marine-protein companies and a longstanding supplier to High Liner Foods. The acquisition advances its strategy to build a more integrated global seafood and protein business, with High Liner Foods central to its North American expansion.
Thornridge Holdings Limited, which controls approximately 41.4% of the outstanding shares, has entered into a voting and support agreement under which it has agreed, subject to the terms thereof, to vote all its shares in favor of the deal. Moreover, each director and officer of the company has entered into a support and voting agreement pursuant to which each such person has agreed, subject to the terms thereof, to vote all of their shares in favosr of the transaction. Consequently, holders representing approximately 45.4% of the outstanding stock have agreed to vote their shares in favor of the deal.
“Umios’ offer recognizes the value of High Liner Foods’ business and its future potential, delivering a substantial premium and certainty of cash value to our shareholders,” said Robert Pace, chairman of the board and chairman of the special committee. “As part of our competitive review process, we assessed competing proposals alongside the company’s prospects as an independent business and concluded that Umios’ offer represents the best value for shareholders while supporting High Liner Foods’ next phase of growth.”
“This transaction is a powerful endorsement of High Liner Foods, our people and the business we have built from our roots in Lunenburg,” said Paul Jewer, president and chief executive officer. “We know Umios through a longstanding commercial relationship, and Umios knows the value of our expertise, brands and customer relationships. Joining a global seafood leader gives us the scale, sourcing capabilities and investment capacity to pursue our ambitions in an industry poised for growth. Umios’ commitment to keeping our headquarters in Nova Scotia and its plans to invest in our people and the business give us confidence that this is the right path forward for High Liner Foods and our stakeholders.”
“High Liner Foods brings the capabilities and expertise needed to advance our North American growth strategy,” said Daisuke Yasuda, representative director and president of Umios. “As seafood consumption grows, we see significant value in connecting our access to marine resources with High Liner Foods’ ability to develop and deliver products customers want. Our offer reflects that strategic value, delivering a compelling return to High Liner Foods shareholders while creating opportunities for long-term growth and value creation for Umios. We look forward to working with the High Liner team to realize that potential together.”
