High Liner Foods, the Canada-based frozen seafood company, has acquired shrimp producer and importer Rubicon Resources

The deal, struck for an estimated $107m, with 70% to be paid in cash and 30% in High Liner shares, includes a five-year supply agreement with Rubicon’s supply partners with Brian Wynn to remain as Rubicon’s president. 
“Rubicon is an ideal acquisition for High Liner that will provide sales and earnings growth, and expedite diversification of our product portfolio to aquaculture species, like shrimp, that are experiencing stronger growth rates in North America, said Keith Decker, High Liner’s president and CEO.

Brian Wynn, president and founder of Rubicon Resources, added:  “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 was announced at the same time as High Liner’s first-quarter results, which revealed a 5.4% dip in sales to $275.7m compared to the same period in 2016, and also a 15.1% drop in gross profit, down by $9.9 million to $55.5m.

Meanwhile, the company’s adjusted EBITDA decreased by $8.0 million, or 26.4%, to $22.3 million compared to $30.3 million, while the net income dropped 24.6% to $10.7m.

High Liner blamed its disappointing performance for the first three months on the late lent this year, with the result that a proportion of the sales benefit associated with the Lenten period was moved to April compared to the full benefit being realised in the first quarter as was the case last year. 

“With stronger sales and earnings in April of this year compared to the same month last year, and improved plant efficiency, we expect year-over-year sales volume and earnings trends in the second quarter of 2017 will be greatly improved from those experienced in the first quarter,” Decker said.