Centre Partners Acquires Connors Bros.
The owner of the Bumble Bee canned seafood brand is going private. Connors Bros. Income Fund announced yesterday that it agreed to sell its operating subsidiaries to Centre Partners Management for CAD$437.5 million (US$423 million).
Connors Bros. shareholders will receive CAN$8.50 (US$8.22) per unit in cash for the operating subsidiaries held by the fund, which trades on the Toronto Stock Exchange.
The deal is subject to shareholder approval (a special meeting is scheduled for Nov. 10) and is expected to close in mid-November.
However, the agreement includes a 45-day "go shop" provision allowing Connors Bros. to solicit other offers and engage in negotiations.
In addition to Bumble Bee, Connors Bros. shelf-stable seafood brands include Clover Leaf, Brunswick, Beach Cliff and Snow's. It also owns the Sweet Sue canned chicken brand. Last week, Connors Bros. sold its Castleberry's canned red meat business to Aunt Kitty's Foods, a subsidiary of Hanover Foods of Hanover, Pa.
In the second quarter ending June 28, the Toronto-based company generated revenues of $250.5 million, up $18.7 million from the same period last year. Including the Castleberry's recall, which was due to a botulism outbreak and led to the sale of the Augusta, Ga., company, second-quarter revenues totaled $231.8 million.
The company posted a second-quarter net gain of $9.9 million, compared to a net loss of $26.1 million during the same period last year.
Centre Partners is quite familiar with the seafood industry. In May 2003, the New York-based private equity firm and Bumble Bee Seafoods' senior management team acquired the San Diego company from ConAgra Foods. Nine months later, Bumble Bee merged with Connors Bros. to form North America's largest branded seafood company.
"This all-cash transaction represents an excellent opportunity for the fund's [shareholders] to realize a significant premium on their units given the changes in the Canadian public markets related to income trusts while also preserving the opportunity for even greater value during the go shop process," says Bernard Valcourt, the fund's chairman.