Mi’kmaq First Nations group, Premium Brands to buy Clearwater Seafoods for $1 billion

Mi’kmaq First Nations group, Premium Brands to buy Clearwater Seafoods for $1 billion

HALIFAX — Premium Brands Holdings Corp. and a group of Mi’kmaq First Nations have banded together to buy Clearwater Seafoods in a billion-dollar deal the seafood company’s chairman says is a step towards “advancing reconciliation in Canada.”

The deal announced Monday would be the largest investment in the seafood industry by a Canadian Indigenous group and comes eight months after Halifax-based Clearwater said it was exploring a possible sale.

The Mi’kmaq First Nations coalition, led by the Membertou First Nation, and Premium holdings will each acquire half ownership of Clearwater through the new partnership FNC Holdings Ltd.

Membertou First Nation Chief Terry Paul called the purchase of Atlantic Canada’s largest fishing company “a transformational opportunity for the Mi’kmaq.”

In a statement, he said the deal will allow Mi’kmaq “to become significant participants in the commercial fishery through the investment in existing infrastructure, management expertise, and a global market presence.”

The $1-billion sale, including debt, would see Clearwater shareholders receive $8.25 per share, which represents a 60.2 per cent premium to the average volume-weighted average price for the 20-day period preceding the strategic review announcement on March 5.

The transaction has received unanimous approval of Clearwater’s board and is subject to approval by Clearwater shareholders in January.

The Mi’kmaq expect to hold Clearwater’s Canadian fishing licences within a fully Mi’kmaq-owned partnership.

Paqtnkek, Pictou Landing, Potlotek, Sipekne’katik, and We’koqma’q have confirmed their intention to participate with Membertou and Miawpukek in the investment.

Clearwater chairman Colin MacDonald said the transaction will “enhance the culture of diversity and sustainable seafood excellence that exists at Clearwater.”

“I am very pleased to recommend this transaction,” he said in a statement. “It represents great value for shareholders, leverages the expertise within the company while advancing Reconciliation in Canada.”

Each of Clearwater’s directors, plus the CEO and chief financial officer, who cumulatively control 63.9 per cent of outstanding shares, have entered into agreements to vote in favour of the transaction.

Premium Brands said it will raise $250 million of new equity capital from a $200-million bought deal public offering and a $50-million concurrent private placement with CPP Investments.

Christine Penney, vice-president of sustainability and public affairs at Clearwater, called the sale “a historic opportunity for the Mi’kmaq to become significant players in the offshore commercial fishery and the global seafood industry.

“We’re really excited about this next chapter for Clearwater,” she said Tuesday.

Penney said the seafood company is expected to continue under the existing Clearwater brand and operationally “will look very much as it does today.”

The sale is expected to close in the first half of 2021, subject to conditions including court and shareholder approval.

Clearwater is a vertically integrated seafood company, with fishing operations, processing facilities and a sales and marketing team.

The company fishes a variety of seafood, including scallops, lobster, clams and crab in Canada, Argentina and the U.K, with sales in 48 countries around the world.

This report by The Canadian Press was first published Nov. 10, 2020.

Companies in this story: (TSX:CLR, TSX:PBH)

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