High Liner Foods Inc : High Liner Foods Announces Acquisition of American Pride Seafoods

October 1, 2013

LUNENBURG, NS, Oct. 1, 2013, 2013 (Canada NewsWire via COMTEX) --High Liner Foods acquires value-added frozen seafood and scallop processing businesses (all figures are in U.S. dollars ("USD") unless otherwise noted) --

High Liner Foods Incorporated (TSX: HLF) ("High Liner Foods" or "the Company"), the leading North American value-added frozen seafood company, announced today it has acquired the principal assets and operations of American Pride Seafoods LLC ("American Pride") from Seattle-based American Seafoods Group LLC ("American Seafoods Group").

American Pride is primarily a value-added frozen seafood foodservice and scallop processing business based in New Bedford, MA. The acquisition is expected to bolster High Liner Foods' market leadership position in the foodservice segment of the U.S. value-added frozen seafood industry, and also results in the Company adding significant U.S.-based scallop processing operations to its business portfolio.

High Liner Foods paid $34.5 million in cash proceeds, subject to closing working capital adjustments, to acquire American Pride's tangible assets, which principally include inventory, plant and equipment located in New Bedford, and excludes accounts receivables of approximately $15.5 million, for a total enterprise value of approximately $50 million. As part of the transaction, the Company assumed certain operating leases related to the acquired businesses. High Liner Foods does not expect any material intangible assets will be recorded in its financial statements as a result of the acquisition.

"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," said Henry Demone, CEO of High Liner Foods. "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's branded and private label products are primarily distributed in the U.S. to foodservice customers in the commercial and independent restaurant, health care and education markets, as well as to some export and U.S. retail markets.

"Our long history with American Pride and its excellent employees made the decision to sell the business a difficult one," said Bernt Bodal, Chief Executive Officer of American Seafoods Group. "However, this sale will allow us to strengthen our position as a producer of premium seafood products from the sustainably-managed fisheries in Alaska and the Pacific Northwest and lead the industry in developing new products and markets from those fisheries. We want to thank the dedicated and talented people at American Pride for all of their contributions to the success of American Seafoods Group. We wish High Liner Foods and our former employees all the best in the future."

American Pride's revenues were approximately $190 million in 2012. High Liner Foods 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. One-time costs associated with the acquisition will be expensed in the current period and the acquisition will be financed with existing credit facilities.

High Liner Foods plans to delay the integration of this acquisition into its business and will operate American Pride without any substantial changes to its existing operations through 2014. This will allow High Liner Foods to continue its current efforts focused on fully realizing the synergies related to integrating Icelandic USA, which it acquired in Q4 2011. 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. While the operating margins of American Pride have traditionally been lower than those of High Liner Foods, the Company expects these margins will improve to levels closer to High Liner Foods' existing operating margins once American Pride is fully integrated and expected synergies from the transaction are realized.

RBC Capital Markets acted as financial advisor to High Liner Foods. Moelis & Company LLC acted as financial advisor to American Seafoods Group.

About High Liner Foods

High Liner Foods is the leading North American processor and marketer of value-added frozen seafood. High Liner Foods' retail 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 branded products under the High Liner, Icelandic Seafood, FPI, Viking, Mirabel and Samband of Iceland labels to restaurants and institutions, and is the major supplier of private label value-added frozen seafood products to North American food retailers and food service distributors. High Liner Foods is a publicly traded Canadian company, trading under the symbol HLF on the Toronto Stock Exchange.

About American Seafoods Group

American Seafoods Group, a private company located in Seattle, Washington, is a leader in the harvesting, at-sea processing and supply of quality seafood. Through its operating companies, American Seafoods Group harvests, processes, distributes and markets a diverse range of fillet, surimi, roe, and block product offerings from sustainably managed fisheries in U.S. waters off Alaska and the Pacific Northwest and also develops innovative new products from sustainable fisheries resources for human and animal nutrition, cosmetic, and other industrial applications. Fish are harvested aboard the Company's six state-of-the-art catcher processors, and marketed and distributed domestically to customers in the U.S., and internationally to customers in Asia and Europe.

This document contains forward-looking statements. Forward-looking statements can generally be identified by the use of the conditional tense, the words "expect", "would", "plan", "anticipates" and "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: High Liner Foods becoming the leading frozen seafood supplier in North America; increasing value to shareholders; the acquisition being accretive to earnings; achieving synergies and the timing of any synergies; and improvements in margins. These statements are based on a number of factors and assumptions, including: our ability to integrate the acquisition into our operations; 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, including our ability to integrate the acquisition into our operations, achieving the expected synergies, 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 U.S. 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 [e-mail].

SOURCE High Liner Foods Incorporated

To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/October2013/01/c5973.html

SOURCE: High Liner Foods Incorporated

Heather Keeler-Hurshman, CA Director of Investor Relations High Liner Foods Tel:
[phone] [e-mail]