Premium Brands Holdings Corporation (TSX:PBH) and a coalition of Mi'kmaq First Nations entered into a definitive arrangement agreement to acquire Clearwater Seafoods Incorporated (TSX:CLR) for approximately CAD 540 million on November 9, 2020. The purchase price is subject to certain adjustments. Under the terms of agreement, Premium Brands and Mi'kmaq First Nations through a newly formed company owned equally by both will acquire all of the issued and outstanding common shares of Clearwater and the units issued under various Clearwater equity compensation plans for CAD 8.25 per share in a transaction valued at approximately CAD 1 billion, including debt. If the transaction closes on or before January 29, 2021, Clearwater shareholders will receive CAD 8.25 per Clearwater common share. If the transaction closes after January 29, 2021, but on or before April 30, 2021, Clearwater shareholders will receive CAD 8.30 per Clearwater common share. If the transaction closes after April 30, 2021, but on or before June 30, 2021, Clearwater shareholders will receive CAD 8.35 per Clearwater common share. As part of the transaction, a newly formed Canadian entity, wholly-owned by the Mi'kmaq First Nations, will acquire substantially all of the Canadian seafood licenses held by Clearwater. In the event of termination of the transaction, Clearwater shall be liable to pay a termination fee of CAD 22 million while it will be entitled to receive a termination fee of CAD 26 million if the deal is terminated by the buyers.

Premium Brands has entered into an agreement with Cormark Securities Inc., BMO Capital Markets, CIBC Capital Markets, National Bank Financial Inc. and Scotiabank for a bought deal financing (offering) for gross proceeds of approximately CAD 200 million. In addition, Premium Brands will complete a private placement of common shares for aggregate gross proceeds of approximately CAD 50 million. Premium Brands intends to use the net proceeds from private placement and offering to temporarily repay indebtedness under credit facilities, which will then be drawn upon to fund the transaction.

Transaction is subject to a number of conditions, including court approval, regulatory approvals, lock-up agreements, dissent rights have not been exercised with respect to more than 5.0% of the issued and outstanding common shares, Clearwater shareholder approvals and compliance with the Competition Act (Canada). The transaction is not subject to the financing conditions. Clearwater board of directors unanimously approved the transaction on recommendation of a special committee. Each of the directors and the Chief Executive Officer and Chief Financial Officer of Clearwater has entered into a voting support agreement pursuant to which each has committed to vote in favor of the transaction. In the aggregate, parties holding or controlling approximately 63.91% of the total number of issued and outstanding Clearwater common shares have agreed to vote in favor of the transaction. A special meeting of shareholders of Clearwater will be held on January 7, 2021. The Board of Clearwater unanimously recommends the shareholders to vote in favor of the transaction. As of January 7, 2021, the majority of shareholders of Clearwater approved the transaction. Approval under the Competition Act was received January 6, 2021. Clearwater intends to seek a final order of the Supreme Court of Nova Scotia to approve the transaction at a hearing to be held on January 8, 2021. On January 8, 2021, the Supreme Court of Nova Scotia issued its final order approving the Arrangement. The transaction is expected to close in the first half of 2021. As of December 11, 2020, the transaction is expected to be completed in the first or second quarter of 2021. As of January 7, 2021, subject to the issuance of the final order, the transaction is expected to close and take effect on or about January 25, 2021. The transaction is expected to have immediate double-digit earnings per share accretion for Premium Brands.

Cormark Securities Inc. acted as financial advisor, Bryan & Company LLP, Vince Mercier, Jennifer Grossklaus, Sarah Powell, Ian Crosbie and Sharon Ford of Davies Ward Phillips & Vineberg LLP and Bennett Jones LLP acted as legal advisors to Premium Brands. Royal Bank of Canada (TSX:RY) and Antarctica Advisors LLC acted as financial advisors to Clearwater. David Randell, David Randell and Colleen Keyes of Stewart McKelvey LLP and Jason Gudofsky of McCarthy Tétrault LLP acted as legal advisors to Clearwater Special Committee. McInnes Cooper LLP acted as legal advisor to Clearwater. Scotia Capital Inc. provided fairness opinion to the Clearwater Special Committee and Clearwater's board of directors. Grant Thornton is acting as financial advisor and The Breton Law Group is acting as legal advisor to Mi'kmaq First Nations. Computershare Trust Company of Canada acted as Depository for Clearwater. Fabian Beullekens, Sylvain Cailleau and Jing Li of Allen & Overy acted as legal advisor to Premium Brands. Vincent A. Mercier, Jennifer Grossklaus, Sarah V. Powell, Ian Crosbie and Sharon Ford of Davies Ward Phillips & Vineberg acted as an advisor to Premium Brands Holdings Corporation in the deal.

Premium Brands Holdings Corporation (TSX:PBH) and a coalition of Mi'kmaq First Nations completed the acquisition of Clearwater Seafoods Incorporated (TSX:CLR) on January 25, 2021. The Shares are expected to be delisted from the Toronto Stock Exchange on or about the close
of business on January 26, 2021.