The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from CNW Group

HIGH LINER FOODS ANNOUNCES ADDITIONAL DETAIL ON PROPOSED ACQUISITION

Friday, December 10, 2010

HIGH LINER FOODS ANNOUNCES ADDITIONAL DETAIL ON PROPOSED ACQUISITION12:28 EST Friday, December 10, 2010Acquisition expected to further expand High Liner's presence in U.S. seafood foodservice industry (all figures in USD unless otherwise noted)LUNENBURG, NS, Dec. 10 /CNW/ - High Liner Foods Incorporated (TSX: HLF; HLF.A), a leading North American processor and marketer of superior quality seafood, announced today that the company has plans to acquire Viking Seafoods, Inc. (Viking), a value-added foodservice company based in Malden, Massachusetts.  The transaction is expected to close within the next week, subject to High Liner's completion of its due diligence process, final board approval and finalization of a formal purchase agreement.The acquisition is expected to substantially increase High Liner Foods' share of the market for broad line value-added seafood products in the U.S. foodservice industry. Fishery Products International (FPI), High Liner Foods' go-to-market arm for the U.S. foodservice industry, is one of the leading suppliers 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 approximately $40 million. The purchase price will not include Viking's plant in Malden, Massachusetts, which High Liner expects to lease.  High Liner, which expects the acquisition to 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. 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," said Henry Demone, president and CEO of High Liner Foods, Inc. "Viking is well-established in many key market segments, and known for offering its customers quality and value."Viking brand products are distributed nationally in the U.S. to customers in the health care, education and commercial and independent restaurant markets."We are very proud of the unique value-added products and the customer-first philosophy that the Viking Seafoods name has been associated with since 1956," said Jim Covelluzzi, Chief Executive Officer of Viking Seafoods, Inc. Charles Gulino, President of Viking added, "We have long admired High Liner's U.S. foodservice division FPI and are excited to be joining forces with such a highly regarded and significant player in the market."About Viking Seafoods, Inc.Viking Seafoods, Inc. has grown into one of the largest independently owned and operated American companies in the seafood industry today. The company owns and operates a modern state-of-the-art processing plant and distribution center ideally located in Malden, Massachusetts. Viking brand products are distributed nationally throughout the United States.About High Liner Foods IncorporatedHigh Liner Foods Incorporated is a leading North American processor and marketer of prepared, value-added frozen seafood.  High Liner's branded products are sold throughout the United States, Canada and Mexico under the High Liner®, Fisher Boy®, Mirabel® and Sea Cuisine™ labels, and are available in most grocery and club stores.  The Company also sells its High Liner®, FPI® and Mirabel® food service products to restaurants and institutions, and is a major supplier of private label seafood products to North American food retailers and food service distributors.  High Liner Foods is a publicly traded Canadian company, trading under the symbols HLF and HLF.A on the Toronto Stock Exchange.This document contains forward-looking statements. Forward-looking statements can generally be identified by the use of the conditional tense, the words "may", "should", "would", "believe", "plan", "expect", "intend", "anticipate", "estimate", "foresee", "objective" or "continue" or the negative of these terms or variations of them or words and expressions of similar nature.Specific forward-looking statements in this document include, but are not limited to expectations with respect to: completion of the proposed acquisition including financing, determination of the final price and the property lease, which all may be impacted by due diligence results, completion of negotiations and continued availability of financing; High Liner Foods' share of the market for broad line value-added seafood products in the U.S. foodservice industry, which assumes no material customer losses and may be impacted by industry competition, market forces and the state of the economy; whether any acquisition will be accretive which may be impacted by business integration risks, future raw material costs, anticipated financial performance, market forces and the state of the economy; and whether further acquisitions occur which may be impacted by availability of suitable targets, market conditions and the state of the economy.  These statements are based on a number of additional factors and assumptions including, but not limited to: availability, demand and prices of raw materials, energy and supplies; the condition of the Canadian and United States economies; product pricing; foreign exchange rates, especially the rate of exchange of the Canadian dollar to the U.S. dollar; our ability to attract and retain customers; our operating costs; interest rates; and continued access to capital.  The statements are not a guarantee of future performance.  By their nature, forward-looking statements involve uncertainties and risks that the forecasts and targets will not be achieved.  Readers are cautioned not to place undue reliance on forward-looking statements, as actual results may differ materially from those expressed in such forward-looking statements.  We include in publicly available documents filed from time to time with securities commissions and the Toronto Stock Exchange, a discussion of the risk factors that can cause anticipated outcomes to differ from actual outcomes.  Except as required under applicable securities legislation, we do not undertake to update forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf, whether as a result of new information, future events or otherwise.For further information about the Company, please visit our website at www.highlinerfoods.com or send an e-mail to investor@highlinerfoods.com. For further information: K.L. Nelson  Vice President Corporate Services, Chief Financial Officer & Secretary High Liner Foods Incorporated   Tel:  (902) 634-6200 investor@highlinerfoods.comMark Cohen   Investor RelationsThe EquicomGroup Inc.   Tel: (416) 815-0700 ext.253 mcohen@equicomgroup.com