HIGH LINER FOODS ACQUIRES LEADING U.S. BREADED AND BATTERED SEAFOOD BRANDS MRS. PAUL'S AND VAN DE KAMP'S FROM CONAGRA BRANDS, INC. FOR USD $55 MILLION

Cision Canada

12 hours ago

Transaction secures existing contract manufacturing business bringing incremental volume, margin, synergies and growth opportunities
Estimated to deliver USD $11 million annual run rate Adjusted EBITDA 1 from 2027, inclusive of current contract margin, incremental contribution margin and net cost synergies, with potential for further growth
Further diversifies the High Liner Foods portfolio adding market leading brands sourced from high quality Alaskan White Fish, produced in U.S. manufacturing facilities
Positions High Liner Foods for scale in U.S retail with incremental sales opportunities afforded by complementary distribution profile and customer relationships
(1) This is a non-IFRS financial measure. For more information on non-IFRS financial measures, see "Non-IFRS Financial Measures" in our Fourth Quarter 2024 Management's Discussion and Analysis ("4Q2024 MD&A").
LUNENBURG, NS, June 6, 2025 /CNW/ - High Liner Foods Incorporated (TSX: HLF) ("High Liner Foods" or "the Company"), a leading North American value-added frozen seafood company, today announced it has entered into a purchase agreement to acquire the Mrs. Paul's and Van de Kamp's brands of frozen breaded and battered fish products from Conagra Brands ("Conagra") for USD $55 million, inclusive of approximately USD $36 million in inventory. The purchase price is subject to a customary inventory adjustment.
"This is a highly strategic and compelling opportunity for High Liner Foods that will serve as a catalyst for further growth in the U.S retail market," said Paul Jewer, President and Chief Executive Officer of High Liner Foods. "By taking full ownership of these well established and respected brands, we will capture additional value for our shareholders and ensure a seamless transition for existing customers. We look forward to offering choice and value to an expanded portfolio of customers and consumers in the growing U.S market."
High Liner Foods currently co-manufactures products for Mrs. Paul's and Van de Kamp's brands at its U.S based manufacturing facilities, an average of 25 million pounds annually. Today's transaction secures the volume associated with the Company's current contract with Conagra which is due to expire in 2027. It is anticipated to increase High Liner Foods' annual volume from this business to a total of approximately 29 million pounds of fish procured, processed and sold in the U.S, aligned with the Company's strategy to continue to diversify its global supply chain.
Before reaching the anticipated annual run rate of USD $11 million Adjusted EBITDA in 2027, which is inclusive of current contract margin, incremental contribution and synergies, the transaction is anticipated to generate incremental Adjusted EBITDA for 2026 of approximately USD $4 million on top of existing contract margins. The Company anticipates approximately 12 – 18 months of ramp-up time to realize synergies from across the Company's operations which are reflected, after transaction costs, in the estimated annual run rate from 2027 onwards. The transaction is expected to be slightly accretive to Adjusted EBITDA starting in the second half of 2025.
Mrs. Paul's and Van de Kamp's are leading brands in the frozen breaded and battered category in U.S retail with high consumer awareness. High Liner Foods intends to leverage the brands' strong conversion metrics and brand equity to drive incremental sales of its diversified portfolio of branded and value-added retail products through an expanded distribution network and a significant national base of new retail customers.
The Company will fund the transaction from its existing ABL facility. The transaction is expected to close at the end of June 2025, subject to customary closing conditions.
Mr. Jewer concluded, "This strategic transaction is one example of the steps we are taking to position High Liner Foods for future growth, leveraging our healthy balance sheet today to secure profitable volume and incremental growth for years to come. We have a clear line of sight to significant synergies that will strengthen our performance over time through operational efficiencies and incremental sales opportunities."
Advisors
BMO Capital Markets acted as exclusive financial advisor to High Liner Foods in connection with the transaction. Goodwin Procter LLP served as legal counsel to High Liner Foods.
Non-IFRS Measures
The Company reports its financial results in accordance with International Financial Reporting Standards ("IFRS"). Included in this press release are the following non-IFRS financial measures: Adjusted EBITDA. The Company believes this non-IFRS financial measure provides useful information to both management and investors in measuring the financial performance and financial condition of the Company for the reasons outlined below. This measure does not have any standardized meaning as prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other publicly traded companies, nor should it be construed as an alternative to other financial measures determined in accordance with IFRS.
Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization adjusted for items that are not considered representative of ongoing operational activities of the business.
We use Adjusted EBITDA as a performance measure as it approximates cash generated from operations before capital expenditures and changes in working capital, and it excludes the impact of expenses and recoveries associated with certain non-routine items that are not considered representative of the ongoing operational activities, as discussed above, and share-based compensation expense related to the Company's share price. We believe investors and analysts also use Adjusted EBITDA to evaluate the performance of our business. The most directly comparable IFRS measure to Adjusted EBITDA is "Net income" on the consolidated statements of income. Adjusted EBITDA is also useful when comparing to other companies, as it eliminates the differences in earnings that are due to how a company is financed. Also, for the purpose of certain covenants on our credit facilities, "EBITDA" is based on Adjusted EBITDA, with further adjustments as defined in the Company's credit agreements. For a reconciliation of Adjusted EBITDA to net income, refer to the Company's MD&A for the fifty-two weeks ended December 28, 2024 which is available on SEDAR+ at www.sedarplus.com.
Forward Looking Statements
This press release contains forward-looking information within the meaning of applicable securities laws, including, but not limited to, statements regarding the Company's acquisition of the Mrs. Paul's and Van de Kamp's brands and associated inventories, the expected timing for closing such acquisition, the anticipated benefits and synergies from such acquisition, the future financial and operational performance of the Company and the business to be acquired, including Adjusted EBITDA, financing of the acquisition, and the business strategies and operational activities of the Company and the markets and industries in which it operates. Forward-looking statements are based on information currently available to the Company and management's estimates, expectations and assumptions, which we believe are reasonable as of the current date but may prove to be incorrect. The material factors and assumptions used to develop the forward-looking information include, but are not limited to: availability, demand and prices of raw materials, energy and supplies; expectations with regards to sales volume, earnings, product margins, product innovations, brand development and anticipated financial performance; the ability to develop new and innovative products that result in increased sales and market share; the maintenance of existing customer and supplier relationships; manufacturing facility efficiency; the ability of the Company to reduce operating and supply chain costs; the condition of the Canadian and American economies; product pricing; foreign exchange rates, especially the rate of exchange of the CAD to the USD; the ability to attract and retain customers; operating costs and improvement to operating efficiencies; interest rates; continued access to capital; the competitive environment and related market conditions; the ability of the Company to execute and integrate the acquisition; and the general assumption that none of the risks identified below will materialize. Forward-looking statements are also subject to risks and uncertainties, including, but not limited to, risks relating to the inability to successfully transition and integrate the business acquired following closing, the risk that the acquisition may not be completed in a timely manner or at all, risks related to a failure to obtain financing by the Company on acceptable terms, the potential failure to realize anticipated synergies and other benefits from the proposed transaction, customer risk, geopolitical and tariff risks, and uncertainty and adverse changes in general economic conditions and consumer spending habits. Actual results or events may differ materially from those expressed or implied by such forward-looking statements. Additional information about these and other assumptions, risks and uncertainties is included in the Company's securities regulatory filings, including under the headings "Risk Factors" and "Forward-Looking Information" in the Company's annual Management's Discussion & Analysis, which can be found under the Company's profile on SEDAR+ at www.sedarplus.ca. Undue reliance should not be placed on this forward-looking information, which applies only as of the date hereof, and the Company does not undertake to update or revise any forward-looking information, whether as a result of any new information, future events or otherwise, except as may be required by applicable law.
About High Liner Foods Incorporated
High Liner Foods Incorporated is a leading North American processor and marketer of value-added frozen seafood. High Liner Foods' retail branded products are sold throughout the United States and Canada under the High Liner, Fisher Boy, Mirabel, Sea Cuisine, and Catch of the Day labels, and are available in most grocery and club stores. The Company also sells branded products to restaurants and institutions under the High Liner, Mirabel, Icelandic Seafood and FPI labels and is a major supplier of private label value-added seafood products to North American food retailers and foodservice distributors. High Liner Foods is a publicly traded Canadian company, trading under the symbol HLF on the Toronto Stock Exchange.
For further information about the Company, please visit our website at www.highlinerfoods.com or send an e-mail to [email protected].
SOURCE High Liner Foods Incorporated