All amounts in Canadian dollars unless otherwise
stated
/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
OR FOR DISSEMINATION IN THE UNITED
STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY
CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS./
- Premium Brands and a Mi'kmaq First Nations
Coalition led by Membertou First Nation
to jointly acquire Clearwater, Atlantic
Canada's largest wild seafood company
- Clearwater shareholders
to receive $8.25 in cash per
Clearwater common
share
- Clearwater to continue
to operate as a distinct entity thereby ensuring continuity for its
brand, employees and significant community involvement in
Atlantic Canada
- Premium Brands to raise $250
million of new equity capital by way of a $200 million bought deal public offering and a
$50 million concurrent private
placement with CPP Investments
VANCOUVER, BC, Nov. 9, 2020 /CNW/ - Premium Brands Holdings
Corporation ("Premium Brands" or the "Company") (TSX: PBH) and a
coalition of Mi'kmaq First Nations (the "Participating
Communities") are pleased to announce that they have entered into a
definitive arrangement agreement with Clearwater Seafoods
Incorporated ("Clearwater"), pursuant to which Premium Brands and
the Participating Communities, through a newly formed company owned
equally between Premium Brands and the Participating Communities
(the "Joint Venture"), have agreed to acquire all of the issued and
outstanding common shares of Clearwater and the units issued under
various Clearwater equity
compensation plans for $8.25 per
share (subject to adjustment as described below) in a transaction
valued at approximately $1 billion,
including debt (the "Transaction").
This strategic investment represents a transformational change
in Canadian fisheries, that positions Clearwater to accelerate its growth both
domestically and internationally.
"We are very pleased to be partnering with both the Mi'kmaq
First Nations communities and Clearwater," said George Paleologou, President and CEO of Premium
Brands. "Clearwater on its own is
a world class seafood company with a great management team,
best-in-class products and a globally respected brand. In
partnership with us and the Mi'kmaq First Nations communities, it
will become an even stronger business by leveraging the
complementary strengths of our three organizations," added Mr.
Paleologou.
"We are also very pleased to be playing a role in this historic
opportunity to significantly enhance First Nations' participation
in Canada's east coast commercial
fisheries," stated Mr. Paleologou.
"This represents a historic opportunity for the Mi'kmaq to
strengthen our role in Canada's
commercial fisheries, including playing a much larger part in its
unique deep-water fisheries," said Chief Terry Paul, Membertou First Nation. "Mi'kmaq
will not only become 50% owners of Clearwater with our new partner, Premium
Brands, but will proudly hold all of Clearwater's Canadian fishing licences within
a fully Mi'kmaq owned entity. Each of Paqtnkek, Pictou Landing, Potlotek, Sipekne'katik and
We'koqma'q have confirmed their intention to participate with
Membertou and Miawpukek in this
historic investment," added Chief Terry
Paul.
"We are very excited about working with Premium Brands and the
Participating Communities to continue to grow and strengthen our
business while preserving our culture and community presence in
Atlantic Canada," said
Ian Smith, President and CEO of
Clearwater. "Furthermore, this
partnership ideally positions us to continue building on the legacy
created by Clearwater's founders,
Colin MacDonald and John Risley" added Mr. Smith.
Transaction Highlights
- Creation of an Industry-Leading Global Seafood Group.
The combined seafood operations of Clearwater, Premium Brands and the
Participating Communities is expected to generate more than
$1.3 billion(1) in annual
sales, with the majority of Clearwater's sales (approximately
89%)(2) outside of Canada.
- Accretive to Premium Brands. The Transaction is expected
to have immediate double-digit earnings per share accretion for
Premium Brands.
- Synergistic Growth Platform. The Transaction delivers a
strong platform for synergistic growth by enabling all three
parties to leverage each other's complementary strengths, including
Clearwater's global distribution
infrastructure and unparalleled access to highly valued wild-catch
seafood products; the Participating Communities' access to unique
sources of highly valued wild-catch seafood products; and Premium
Brands' deep expertise in value-add product creation, brand
development and extensive customer relationships in Canada and the
United States.
- Groundbreaking First Nations Partnership. The
partnership between Premium Brands, the Participating Communities
and Clearwater creates a long term
'made in Canada' structure that
will contribute to the preservation and enhancement of Canada's national seafood resources for the
benefit of First Nations, the stakeholders of Premium Brands and
Clearwater, as well as for all
Canadians.
- Stable Cash Flow Generation. The Transaction is
structured such that Premium Brands and the Participating
Communities will receive stable annual cash flows from Clearwater, while ensuring Clearwater is well capitalized to execute its
business plan, including funding its maintenance and growth capital
requirements.
- Common Culture and Shared Vision. Clearwater has an experienced professional
management team that shares the entrepreneurial values that are
core to both Premium Brands and the Participating Communities.
Furthermore, all three organizations share a common long-term
optimistic vision for the future of sustainable wild-catch seafood
products.
Additional Transaction Details
The Transaction will be completed by way of a plan of
arrangement under the Canada Business Corporations Act.
Completion of the Transaction is subject to a number of conditions,
including court and Clearwater
shareholder approvals and compliance with the Competition
Act (Canada). The Transaction
is not subject to a financing condition and is expected to close in
the first half of 2021.
If the Transaction closes on or before January 29, 2021, Clearwater shareholders will receive
$8.25 in cash per Clearwater common share. If the Transaction
closes after January 29, 2021, but on
or before April 30, 2021,
Clearwater shareholders will
receive $8.30 in cash per
Clearwater common share. If the
Transaction closes after April 30,
2021, but on or before June 30,
2021 (the outside date for the Transaction) Clearwater shareholders will receive
$8.35 in cash per Clearwater common share.
As part of the Transaction, a newly formed Canadian entity,
wholly-owned by the Participating Communities, will acquire
substantially all of the Canadian seafood licences held by
Clearwater. Clearwater will maintain a perpetual licence
for use of the seafood licences.
The Joint Venture's capitalization will be funded through
subordinated debt provided by Premium Brands, proceeds from the
sale of substantially all of the Canadian seafood licences held by
Clearwater to the Participating
Communities, a newly established syndicated credit facility and
nominal equity contributions shared by Premium Brands and the
Participating Communities. The structure will provide Premium
Brands and the Participating Communities with access to stable cash
flows generated through, among other things, their subordinated
debt interests in Clearwater while
ensuring Clearwater is properly
capitalized to execute its business plan, including funding its
maintenance and growth capital requirements.
Additional details will be made available on Premium Brands'
website and may be accessed
at www.premiumbrandsholdings.com/presentations.htm.
Support from Clearwater Stakeholders
In connection with the strategic review process announced by
Clearwater on March 5, 2020, Clearwater formed a special committee of
independent directors to solicit, consider and evaluate various
strategic alternatives available to Clearwater (the "Clearwater Special
Committee"). The Clearwater Special Committee provided its
unanimous recommendation of the Transaction to the Clearwater board of directors. The
Clearwater board of directors,
having received and considered the recommendation of the Clearwater
Special Committee, and in consultation with its financial and legal
advisors, determined that the Transaction is in the best interests
of Clearwater shareholders and
unanimously recommended that Clearwater shareholders vote in favour of the
Transaction at the special meeting of shareholders to be held to
approve the Transaction.
Each of the directors and the Chief Executive Officer and Chief
Financial Officer of Clearwater
has entered into a voting support agreement pursuant to which each
has committed to vote in favour of the Transaction. In the
aggregate, parties holding or controlling approximately 63.91% of
the total number of issued and outstanding Clearwater common shares have agreed to vote
in favour of the Transaction.
"Bought Deal" and Private Placement Financings
Premium Brands is also pleased to announce that it has entered
into an agreement with Cormark Securities Inc., BMO Capital
Markets, CIBC Capital Markets, National Bank Financial Inc. and
Scotiabank, acting as joint bookrunners on behalf of a syndicate of
underwriters (collectively, the "Underwriters"), pursuant to which
Premium Brands will issue, from treasury on a "bought deal" basis,
2,051,000 common shares (the "Shares") at a price of $97.55 per share (the "Issue Price"), for gross
proceeds of approximately $200
million (the "Offering").
In addition, Premium Brands has entered into an agreement under
which Premium Brands will complete a private placement of common
shares at the Issue Price with Canada Pension Plan Investment Board
("CPP Investments"), for aggregate gross proceeds of approximately
$50 million (the "Private
Placement").
Premium Brands intends to use the net proceeds of the Offering
and the Private Placement to temporarily repay indebtedness under
one of its credit facilities, which will then be drawn upon to fund
the Transaction.
Premium Brands has granted the Underwriters an over-allotment
option (the "Over-Allotment Option") to purchase additional Shares
on the same terms, representing up to 15% of the size of the
Offering, exercisable in whole or in part at any time for a period
of up to 30 days following closing of the Offering, to cover
over-allotments, if any. CPP Investments has also been granted an
option (the "Additional Subscription Option") to purchase a number
of additional common shares representing up to 15% of the number of
shares subscribed by them, such option to be exercised and closed
not later than 45 days from the date hereof. If each of the
Over-Allotment Option and Additional Subscription Option are
exercised in full, Premium Brands will receive additional gross
proceeds of approximately $37.5
million, for aggregate gross proceeds from the Offering and
the Private Placement of approximately $287.6 million.
Closing of the Offering is expected to occur on or about
December 1, 2020. The Offering is
subject to normal regulatory approvals, including approval of the
Toronto Stock Exchange.
The Shares issued pursuant to the Offering will be offered in
each of the provinces and territories of Canada by way of a short form prospectus, and
by way of private placement in the United
States to "qualified institutional buyers" pursuant to Rule
144A or in such a manner as to not require registration under the
United States Securities Act of 1933, as amended.
The securities to be offered have not been and will not be
registered under the United States Securities Act of 1933, as
amended, or under any state securities laws, and may not be
offered, sold, directly or indirectly, or delivered within
the United States of America and
its territories and possessions or to, or for the account or
benefit of, United States persons
except in certain transactions exempt from the registration
requirements of such Act. This release does not constitute an offer
to sell or a solicitation to buy such securities in the United States, Canada or in any other jurisdiction where such
offer is unlawful.
Advisors
Cormark Securities is acting as financial advisor to Premium
Brands. Bryan & Company LLP, Davies, Ward, Phillips and
Vineberg LLP and Bennett Jones LLP (competition law matters) are
acting as legal advisors to Premium Brands. Grant Thornton is acting as financial advisor to
the Participating Communities. The Breton Law Group is acting as
legal advisor to the Participating Communities.
RBC Capital Markets and Antarctica Advisors LLC are acting as
financial advisors and Stewart
McKelvey and McCarthy Tétrault LLP (competition law matters)
are serving as legal advisors to the Clearwater Special Committee.
McInnes Cooper is acting as legal
advisor to Clearwater. Scotiabank
has provided a verbal fairness opinion to the Clearwater Special
Committee and Clearwater's board
of directors.
About Premium Brands
Premium Brands owns a broad range of leading specialty food
manufacturing and differentiated food distribution businesses with
operations across Canada,
the United States and Italy.
www.premiumbrandsholdings.com
About the Participating Communities
The Participating Communities will invest in Clearwater through a new legal entity formed
by Membertou and Miawpukek. The
collective investment of the Participating Communities in
Clearwater will represent the
single largest investment in the seafood industry by any Indigenous
group in Canada. Given the
importance of this investment opportunity to the future prosperity
of Mi'kmaq communities, all First Nations in Nova Scotia along with Miawpukek from
Newfoundland and Labrador were provided the opportunity to
participate in the collective investment. While the
Participating Communities will continue to advance implementation
of Treaty Rights with the government of Canada, commercial investments in the seafood
sector are a strategic investment to advance the prosperity of the
Participating Communities, and position them as equal participants
in the commercial economy. The impact of this transformational
investment will be felt across Mi'kmaq communities in Nova Scotia and Newfoundland and Labrador for generations to come.
Forward Looking Statements
This press release contains forward looking statements with
respect to Premium Brands, including, without limitation,
statements regarding its business operations, strategy and
financial performance and condition, proposed acquisitions and
plans and objectives of or involving Premium Brands. While
management believes that the expectations reflected in such forward
looking statements are reasonable and represent Premium Brands'
internal expectations and belief as of November 9, 2020, there can be no assurance that
such expectations will prove to be correct as such forward looking
statements involve unknown risks and uncertainties beyond the
control of Premium Brands which may cause its actual performance
and results in future periods to differ materially from any
estimates or projections of future performance or results expressed
or implied by such forward looking statements.
Forward looking statements generally can be identified by the
use of the words "may", "could", "should", "would", "will",
"expect", "intend", "plan", "estimate", "project", "anticipate",
"believe" or "continue", or the negative thereof or similar
variations. Forward looking statements in this press release
include statements with respect to Premium Brands' expectations
regarding: (i) the timing of closing of the Transaction; (ii) the
benefits arising from the Transaction; (iii) the timing of closing
of the Offering and the Private Placement; and (iv) the use of the
net proceeds of the Offering and the Private Placement.
Forward looking statements are based on a number of key
expectations and assumptions made by Premium Brands, including,
without limitation, that: (i) Premium Brands will realize the
anticipated benefits arising from the Transaction; (ii) Premium
Brands will obtain all required regulatory approvals to complete
the Transaction, including, without limitation, the approval of the
Canadian Competition Bureau; (iii) the conditions to closing the
Transaction, including court and Clearwater shareholder approval, will be
satisfied; (iv) Premium Brands will obtain all required regulatory
approvals to complete the Offering and the Private Placement,
including, without limitation, the approval of the Toronto Stock
Exchange; and (v) the expectations and assumptions outlined in
Premium Brands' MD&A for the 13 and 39 weeks ended September 26, 2020 and for the 13 and 52 weeks
ended December 28, 2019. Although the
forward looking statements contained in this press release are
based on what Premium Brands' management believes to be reasonable
assumptions, Premium Brands cannot assure investors that actual
results will be consistent with such forward looking
statements.
Forward looking statements involve significant risks and
uncertainties and should not be read as guarantees of future
performance or results. Those risks and uncertainties include,
among other things, risks related to: (i) the inability to satisfy
the closing conditions of the Transaction; (ii) the inability to
obtain approval from the Canadian Competition Bureau in respect of
the Transaction; and (iii) the inability to obtain all required
regulatory approvals to complete the Offering and the Private
Placement. Readers are cautioned that the foregoing list of risks
and uncertainties are not exhaustive. Additional factors that could
cause actual results to differ materially from Premium Brands'
expectations are outlined in Premium Brands' MD&A for the 13
and 39 weeks ended September 26, 2020
and for the 13 and 52 weeks ended December
28, 2019.
Forward looking statements reflect management's current beliefs
and are based on information currently available to Premium Brands.
Unless otherwise indicated, the forward looking statements in this
press release are made as of November 9,
2020 and, except as required by applicable law, will not be
publicly updated or revised. This cautionary statement expressly
qualifies the forward looking statements in this press release.
(1)
|
Represents the last
twelve months of operations, pro forma Premium Brands'
acquisitions, and 100% of Clearwater's revenue as of June 30,
2020.
|
(2)
|
Represents the last
twelve months of Clearwater's operations as of June 30,
2020.
|
SOURCE Premium Brands Holdings Corporation