High Liner Foods Inc. is solidifying its U.S. presence with the acquisition of frozen seafood and scallop processing business American Pride Seafoods LLC.
The Lunenburg, N.S.-based company said Tuesday it has struck a deal to buy New Bedford, Mass.-based American Pride from Seattle-based American Seafoods Group LLC for $34.5-million (U.S.).
Including accounts receivable of about $15.5-million, the total enterprise value of the transaction is about $50-million.
High Liner already has a significant presence in the U.S. following its 2011 acquisition of Icelandic Group's U.S. and Asian operations for $230.6-million.
It is a major North American supplier of frozen seafood to restaurants, schools and hospitals.
With the American Pride deal, High Liner says it is adding significant U.S.-based scallop processing operations to its portfolio.
"Our vision is to be the leading frozen seafood supplier in North America and a key component of High Liner Foods' strategy is profitable growth through acquisitions like American Pride, that complement our business and should strengthen our leadership position within the seafood industry," High Liner chief executive officer Henry Demone said in a news release.
"American Pride is well-established in many key market segments and known for offering its customers quality and value. This transaction should create incremental value for our shareholders and bring us one step closer to achieving our vision."
American Pride mostly provides branded and private label products to foodservice customers in the commercial and independent restaurant, health care and education markets, as well as doing some export business and sales to U.S. retail markets.
Its revenues last year were about $190-million.
High Liner said it expects the acquisition to be "modestly accretive to earnings in 2014, after considering the impact of incremental interest costs related to financing the acquisition, and excluding the impact of any integration costs."
The deal is to be financed through existing credit facilities; one-time costs associated with the transaction will be expensed in the current period, the company said.
High Liner said it also plans to delay the integration of American Pride and will operate it without making any major changes through 2014, thus giving High Liner time to fully integrate Icelandic USA.
"As a result, realization of most of the synergies expected from integrating this acquisition into High Liner Foods' business are anticipated to occur in 2015," the company said.
High Liner also said it wants to boost American Pride's margins, which have traditionally been lower than those of High Liner.