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High Liner Foods to acquire US shrimp importer Rubicon

FBR Staff Writer Published 11 May 2017

Canada-based High Liner Foods has agreed to acquire Rubicon Resources, an American seafood importer, for about $107m in a cash-cum-stock deal.

Rubicon primarily imports frozen shrimp products that are sustainably sourced and distributes in the private-label retail market in the US.

High Liner will be paying 70% of the amount in cash and the remainder by issuing its shares to Rubicon.

According to the Canadian frozen seafood company, the acquisition of Rubicon will lay a strong foundation for growth in the shrimp category.

Last year, Rubicon generated sales revenue of around $234m.

Its acquisition is expected to deliver growth in sales and earnings, besides diversifying the product portfolio to shrimp and other aquaculture species that are having stronger growth rates in North America, said High Liner Foods president and CEO Keith Decker.

A five-year supply agreement with the supply partners of Rubicon based on mutually acceptable terms has been made part of the deal. Also included in the deal is a three-year employment contract with Rubicon founder Brian Wynn to continue as its president post acquisition.

Wyn said: "Rubicon's business is built on a commitment to bringing US consumers high-quality sustainable seafood products, and at the heart of our success are the long-term strategic partnerships we've built with our trusted suppliers.

"We've focused on making seafood simple for our customers through innovation, collaboration and creativity, which aligns perfectly with High Liner Foods' mission to drive seafood consumption through innovative solutions that make it easy for North Americans to enjoy delicious and healthy seafood."

The acquisition is likely to be closed in the second quarter of the year subject to approvals from High Liner’s lenders and the Toronto Stock Exchange.

Image: Shrimp importer Rubicon to be acquired by High Liner Foods. Photo: courtesy of cbenjasuwan/Freedigitalphotos.net.