HALIFAX — A First Nations chief is calling a billion-dollar deal to buy Atlantic Canada’s largest seafood company a “generational acquisition,” saying it will benefit Indigenous communities “for the next seven generations.”
Premium Brands Holdings Corp. and a group of Mi’kmaq First Nations have banded together to buy Clearwater Seafoods for $1 billion — the largest potential investment in the seafood industry by a Canadian Indigenous group.
Membertou First Nation Chief Terry Paul said Tuesday the acquisition would create an enduring legacy for Mi’kmaq communities.
“The Mi’kmaq will be fishing in the waters until the rest of time,” he said. “Acquiring Clearwater will have lasting positive impacts on the economics of our Mi’kmaq communities.”
The deal immediately raised questions about the potential affect on the region’s “moderate livelihood” fishery.
Tensions over the treaty rights-based fishery boiled over last month after non-Indigenous fishers destroyed the catch of Mi’kmaq fishers and burned a lobster pound to the ground.
Paul said the Clearwater purchase is “strictly a commercial transaction” that does not impact efforts to establish a moderate livelihood fishery.
“Our investment in the commercial offshore fishery is completely separate from our commercial inshore and moderate livelihood fisheries,” he said.
“We are still incredibly committed to our other fisheries ΓǪ this deal does not impact the processes and discussions taking place in the livelihood fishery.”
Paul said it’s too early to say whether Clearwater could purchase lobster from the moderate livelihood fishery.
Meanwhile, he said the long-term plan is to integrate Mi’kmaq workers into the seafood company.
He said through attrition and retirement of existing workers, Clearwater could expand its Indigenous workforce.
The deal announced Monday comes eight months after Halifax-based Clearwater said it was exploring a possible sale.
The Mi’kmaq First Nations coalition, led by the Membertou First Nation, and Premium holdings will each acquire half ownership of Clearwater through the new partnership FNC Holdings Ltd.
The Mi’kmaw coalition will put up $250 million, financed by a 30-year loan from the First Nations Finance Authority.
“This enables us as a collective to invest in this meaningful deal without impacting our finances for other community needs,” Paul said.
Premium Brands said it will raise $250 million of new equity capital from a $200-million bought deal public offering and a $50-million concurrent private placement with CPP Investments.
The $1-billion sale — including debt — would see Clearwater shareholders receive $8.25 per share, which represents a 60.2 per cent premium to the average volume-weighted average price for the 20-day period preceding the strategic review announcement on March 5.
The transaction has received unanimous approval of Clearwater’s board and is subject to approval by Clearwater shareholders in January.
The Mi’kmaq expect to hold Clearwater’s Canadian fishing licences within a fully Mi’kmaq-owned partnership.
Paqtnkek, Pictou Landing, Potlotek, Sipekne’katik, and We’koqma’q have confirmed their intention to participate with Membertou and Miawpukek in the investment.
Clearwater chairman Colin MacDonald said the transaction will “enhance the culture of diversity and sustainable seafood excellence that exists at Clearwater.”
“I am very pleased to recommend this transaction,” he said in a statement. “It represents great value for shareholders, leverages the expertise within the company while advancing Reconciliation in Canada.”
Each of Clearwater’s directors, plus the CEO and chief financial officer, who cumulatively control 63.9 per cent of outstanding shares, have entered into agreements to vote in favour of the transaction.
Christine Penney, vice-president of sustainability and public affairs at Clearwater, called the sale “a historic opportunity for the Mi’kmaq to become significant players in the offshore commercial fishery and the global seafood industry.”
Penney said the seafood company is expected to continue under the existing Clearwater brand and operationally “will look very much as it does today.”
The sale is expected to close in the first half of 2021, subject to conditions including court and shareholder approval.
Clearwater is a vertically integrated seafood company, with fishing operations, processing facilities and a sales and marketing team.
The company fishes a variety of seafood, including scallops, lobster, clams and crab in Canada, Argentina and the U.K, with sales in 48 countries around the world.
This report by The Canadian Press was first published Nov. 10, 2020.
