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September 5, 2018

Canadian food giant: Acquisition of Ready Seafood will accelerate its growth

File Photo/Tim Greenway
File Photo/Tim Greenway
Brendan Ready, left, and his brother John, owners of Ready Seafood Co., are shown in this Mainebiz file photo. On Tuesday, the brothers announced the planned acquisition of their Portland-based company by Premium Brands Holdings Corp., a rapidly growing Canadian food group.

Premium Brands Holdings Corp. (TSX:PBH), a Canadian food group that announced Tuesday its plans to acquire Portland-based Ready Seafood Co., says the transaction will bring its seafood assets to more than $400 million Canadian (or $303 million USD) in annual sales.

Terms of the deal were not disclosed, but the Vancouver-based company said it plans to retain Ready Seafood's co-founders John and Brendan Ready as partners and would keep its three production facilities in Maine.

The transaction is expected to close within four weeks and is subject to customary closing conditions including regulatory approvals and the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, the company stated in a news release.

"We are very pleased to be partnering with John, Brendan, and their talented management team," George Paleologou, president and CEO of Premium Brands, said in a statement. "They are disruptors in what has been a relatively stable industry and have not only brought about significant innovation to the segment but have also played a lead role in ensuring the long term sustainability of the industry. We greatly admire and respect John and Brendan as true industry pioneers and are excited to be welcoming them and their team into our group."

Paleologou added: "John and Brendan will become key partners in our rapidly growing Seafood Group platform, which was created in 2008 with the acquisition of Vancouver Island based B&C Food Distributors. Post our investment in Ready this group will have run rate sales of close to $400 million and its operations will expand across Canada and into the U.S. East Coast."

Ready brothers: Premium Brands, a 'long-term' partner

Courtesy / Ready Seafood
Courtesy / Ready Seafood
Ready Seafood reports annual sales exceed $100 million.

John and Brendan Ready, who founded Ready Seafood in 2004 and have built it into a company with annual sales of more than $100 million, characterized Premium Brands as being a good fit with their company's long-term goals. The company buys and sells over 15 million pounds of live and processed lobster annually, runs three packing and grading shifts 24/7, and sources millions of pounds of live lobster annually from the Gulf of Maine to the Canadian Maritimes, the company says on its website.

"We are very excited to be joining the Premium Brands group," John Ready, co-CEO of Ready Seafood, said in a news release. "Its unique culture and core values, which includes commitments to producing only premium quality products, constant innovation and long term decision making, makes Premium Brands an ideal partner for us."

Co-CEO Brendan Ready added: "With Premium Brands we have found a partner that not only shares our vision for the future but also understands and respects our distinct culture, which is at the heart of our success. With Premium Brands as our long-term partner we look forward to accelerating our growth."

Canadian food giant on acquisition spree

Undercurrent News, a London-based media company that reports on seafood business news around the world, reported that Premium Brands' pending acquisition of Ready Seafood follows an acquisition announced in March of Frandon Seafood, a Quebec-based distributor of fresh and frozen seafood to both food service and retail customers in the greater Montreal area. It reported that the company also bought several meat companies in the past year.

In its second quarter earnings report, filed on Aug. 13, Premium Brands reported record revenue of $761.5 million, representing a 31.9%, or $184.1 million increase, over its second quarter 2017 performance. It also reported record adjusted EBITDA of $74.2 million, up 34.9% over the same period in 2017.

Paleologou told shareholders the company had spent more than $541 million in business acquisitions in 2018 as it pursued a strategic growth plan to be a market leader in the business sectors of meat snacks, sandwiches, dry cured meats, cooked protein and seafood.

"Our strategy of empowering successful food entrepreneurs to build their businesses into world-class entities, without compromising their values and passion for producing great tasting products, is simple but it is at the heart of what is driving our success," Paleologou stated in the company's Aug. 13 financial report.

'Synergistic growth opportunities'

Courtesy / Ready Seafood
Courtesy / Ready Seafood
Premium Brands Holdings Corp. says its acquisition of Ready Seafood will accelerate its growth.

In Tuesday's news release, Paleologou said the pending acquisition of Ready Seafood puts his company in a good position to significantly expand the footprint of its seafood sector.

"Looking forward, we are not only excited by the synergistic growth opportunities between Ready and our other Seafood Group businesses, including gaining proprietary access to a sustainable resource whose global demand is rapidly growing, but also about being able to leverage the strengths of Ready's management team to accelerate the platform's U.S. acquisitions strategy," he said. "This transaction truly positions our Seafood Group as a leading North American seafood platform and further strengthens its management depth by adding a proven team whose talents, drive, entrepreneurship and vision have enabled them to achieve remarkable success in a relatively short period of time."

The transaction is expected to be immediately accretive to both Premium Brands' earnings per share and free cash flow per share for 2018.

Bigelow LLC acted as financial advisor to Ready Seafood Co.

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