Clearwater Seafoods Going Private

Clearwater Seafoods Income Fund yesterday announced that it had entered into an agreement to take the Bedford, Nova Scotia, company under private ownership.

Under terms of the agreement, CS Acquisition Limited Partnership, owned by a consortium led by Clearwater Fine Foods, will acquire all of the partnership units of Clearwater Seafoods Limited Partnership, a subsidiary of the fund.

Unitholders will receive CAD$4.50 per unit in cash, a 32 percent premium over the volume-weighted average trading price over the past 20 trading days on the Toronto Stock Exchange.

After the deal was announced, Clearwater units rose 67 cents, or 18 percent, to CAD$4.42, the biggest gain in its six years of trading. Clearwater units sold for CAD$10 at its initial public offering in July 2002.

"This all-cash transaction represents an excellent opportunity for the Fund's unit holders to realize a significant premium on their units, given the challenging conditions facing the Fund and the changes in the Canadian public markets related to income trusts," says Tom Traves, Fund chairman. "The Special Committee and the full board of the Fund unanimously support the transaction."

Completion of the transaction is subject to unitholder approval at a Sept. 22 meeting.

The company yesterday also announced its second quarter results for fiscal 2008, including $13 million in profits, an 18 percent drop compared to the same period last year. The company's profits have been impacted by low margins on lobster sales, fluctuating currency exchange rates and the commissioning of a new clam fishing vessel.

Founded in 1976, Clearwater Seafoods is a supplier of scallops, lobsters, clams, coldwater shrimp, crab and groundfish to the Canadian, U.S. and European markets.