Premium Brands acquires Westmorland Fisheries, has record third quarter
Vancouver, British Columbia Canada-based Premium Brands Holdings Corporation announced in its third quarter results that it has acquired Westmorland Fisheries – a New Brunswick, Canada-based processor of lobster products.
The sale was revealed during Premium Brand’s announcement of its third-quarter results, in which it reported record revenues of CAD 1.3 billion (USD 1 billion, EUR 903 million) – a 21.9 percent increase compared to the third quarter of 2020. Record revenue was coupled with a record adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of CAD 122.6 million (USD 98 million, EUR 85 million), an increase of 31.1 percent – or CAD 29.1 million (USD 23 million, EUR 20 million) over Q3 2020.
“Our third-quarter results continue to demonstrate the balance and resiliency that we have built into our unique business model as we once again generated record sales and cash flows despite facing a barrage of widespread challenges including significant cost inflation, supply chain disruptions, and labor shortages,” Premium Brands President and CEO George Paleologou said in a press release.
A big part revenue and EBITDA gains were the company’s seafood holdins, according to Paleologou.
“We are particularly pleased with the results of our seafood and distribution platforms, which generated record sales and cash flows due in part to their preparedness for the surge in demand in the foodservice channel following the loosening of pandemic-related restrictions in Canada and the U.S.,” he said. “Our seafood platform grew its sales for the quarter by 77 percent while generating organic growth of 32 percent.”
Not included in that growth was Clearwater Seafoods, which Premium Brands acquired roughly one year ago. Clearwater, Paleologou said, is not included in the company’s “seafood platform” and is instead accounted for as an equity investment.
“[Clearwater] also delivered very strong results with its sales and adjusted EBITDA for the quarter increasing by almost 19 percent and 58 percent, respectively,” he said.
Clearwater itself posted sales of CAD 391.2 million (USD 313 million, EUR 271 million) in the 39 weeks ending 2 October, 2021, with a gross profit of CAD 123.8 million (USD 99 million, EUR 86 million). However, over that same period, the company posted a loss of CAD 18.1 million (USD 14.5 million, EUR 12.5 million), largely as a result of acquisition-related costs such as payments to Premium shareholders.
Overall, the positive results in the seafood segment has Premium content with its seafood strategy, Paleologou said.
“We are very pleased with how our seafood strategies are unfolding and how we are positioned in this very exciting segment of the food industry, which is benefiting from a number of long-term sustainable consumer trends,” he said. “Our investments in product innovation, industry leading management teams and best-in-class operating assets, combined with our targeted acquisitions strategy, have positioned us well to be a global leader in seafood.”
During a conference call regarding the Q3 results, Paleologou said that the acquisition of Westmorland fits into the company’s wider strategy on the lobster market. Premium Brands has steadily been consolidating the North American lobster sector, and has so far acquired Maine Coast, Hancock Gourmet Lobster Co., Viandex, North Delta Seafood, Ready Seafood, Clearwater Seafoods, and now Westmorland Fisheries in the last three years. The company has also acquired other seafood companies like Starboard Seafood, Allseas Fisheries, Mermax, and more as part of its acquisition strategy – which it resumed in August 2020 after a “pause” due to COVID-19.
“We believe that lobster meat is a growing protein with respect to demand. We want to make it easier for consumers to consume lobster,” Paleologou said. “Westmorland is a leading player in North America in this area, so it’s a natural fit for us.”
Premium Brands CFO Will Kalutycz said the company’s continuing investments in lobster are based on its predictions of growth in the category.
“It was all based on growth, and it has just been fabulous, and through COVID there has been a realization of the product by the consumer,” he said. “We’re seeing tremendous growth opportunities, and Westmorland is part of the Ready [Seafood] strategy as part of that growth.”
The company also hinted that it plans to acquire even more seafood companies in the near-future, with “active” acquisition opportunities for three companies that have a total sales value of CAD 990 million (USD 795 million, EUR 688 million). The company also has seven companies in the “early” stages of acquisition, with combined sales of CAD 482 million (USD 386 million, 334 million).
Overall, Premium Brands said it expects to meet its target of CAD 6 billion (USD EUR) in revenue and an EBITDA of over CAD 600 (USD EUR) by 2023.
“We’re very bullish on exceeding our 2023 sales target,” Kalutycz said.
Photo courtesy of Westmorland Fisheries