High Liner Foods
plans to purchase
Viking Seafoods Inc
Dec 15, 2010 10:30 AM
High Liner Foods Inc (TSX: HLF; HLF.A) plans to acquire Viking Seafoods Inc, a foodservice company based in Malden MA. The transaction is expected to close soon, subject to High Liner’s completion of its due-diligence process, final board approval, and finalization of a formal purchase agreement.
This acquisition is expected to substantially increase High Liner Foods’ share of the market for broadline seafood products. Fishery Products International (FPI), High Liner Foods’ go-to-market arm for the US foodservice industry, is a leading supplier of seafood to the foodservice marketplace.
High Liner expects to pay $31.5 million, subject to working capital adjustments, to acquire the private company, which in 2010 had net sales of about $40 million. The purchase price will not include Viking’s plant in Malden, which High Liner expects to lease. High Liner, which anticipates the acquisition will be accretive to earnings per share in 2011, will finance the acquisition with funds drawn from its existing credit facilities. One-time acquisition and financing costs will be expensed in the fourth quarter as required by Canadian GAAP.
“Our vision is to become the leading value-added frozen seafood company in North America,” said Henry Demone, president and chief executive officer of High Liner Foods. “A key component of High Liner’s overall growth strategy is to acquire complementary businesses that strengthen our market leadership position. This deal fits perfectly within that plan. Viking is well-established in many key market segments.”
Viking brand products are distributed nationally to customers in the healthcare, education, and commercial and independent restaurant markets.
A processor and marketer of prepared, frozen seafood, High Liner sells its branded products throughout the United States, Canada, and Mexico under the High Liner, Fisher Boy, Mirabel, and Sea Cuisine labels. The company also sells its foodservice products to restaurants and institutions, and supplies private-label seafood products to North American food retailers and foodservice distributors.
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