High Liner Foods Completes the Acquisition of Rubicon Resources, LLC

- High Liner Foods acquires US importer and distributor of sustainably sourced shrimp (all figures are in U.S. dollars ("USD") unless otherwise noted) -

LUNENBURG, NS, May 30, 2017 /CNW/ - High Liner Foods Incorporated (TSX: HLF) ("High Liner Foods" or "the Company"), the leading North American value-added frozen seafood company, today announced that it has completed the acquisition of Rubicon Resources, LLC ("Rubicon"), previously announced on May 10, 2017. 

"We are very pleased to have completed the acquisition of Rubicon," stated Keith Decker, President and CEO of High Liner Foods.  "Rubicon supports our growth strategy by expediting our diversification into aquaculture species like shrimp that are experiencing higher growth rates in North America, and will also add immediate shareholder value through increased sales and earnings."

"The key to our success has been our relentless customer focus and long-term strategic partnerships with shrimp producers," shared Brian Wynn, Rubicon's chief executive. "Aligning with High Liner Foods will help us to better serve our clients, our employees, and most importantly, the consumers who rely on quality seafood that has been sourced responsibly."

The Company acquired 100% of the outstanding equity of Rubicon, a privately held US based corporation engaged principally in the import and distribution of sustainably sourced frozen shrimp products in the private-label U.S. retail market.  The Company believes this acquisition will provide it with a strong platform for growth in this key species.

Rubicon's annual sales in 2016 were approximately $234.0 million with pro forma Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") of $16.0 million.  The purchase price for Rubicon was $107.0 million prior to transaction fees, and was settled 70% in cash and 30% in High Liner Foods common shares (representing approximately 2.43 million High Liner Foods common shares), with the share consideration subject to a three year stand-still agreement during which time the sellers are not permitted to sell the shares (except in limited circumstances).  The transaction also includes a five-year supply agreement with Rubicon's supply partners based on mutually acceptable terms and a three-year employment contract with Brian Wynn to continue as Rubicon's President. 

The Company does not anticipate it will realize material synergies from this business but it will be immediately accretive in 2017, after considering the impact of incremental interest costs related to financing the acquisition, and excluding the impact of one-time costs associated with the acquisition which will be expensed in the period they are incurred. 

The acquisition was financed using the Company's existing asset-based revolving credit facility ("ABL"), however the Company is in the process of refinancing a portion of this additional ABL debt to a fixed term by replacing it with a $70 million addition to its senior secured Term Loan B.  In regards to this acquisition, RBC Capital Markets acted as financial advisor to High Liner Foods and American Discovery Capital, LLC acted as financial advisor to Rubicon. 

About High Liner Foods Incorporated

High Liner Foods Incorporated is the leading North American processor and marketer of value-added frozen seafood.  High Liner Foods' retail branded products are sold throughout the United States, Canada and Mexico under the High Liner, Fisher Boy, Mirabel, Sea Cuisine and C. Wirthy labels, and are available in most grocery and club stores.  The Company also sells branded products to restaurants and institutions under the High Liner, Icelandic Seafood and FPI labels and is the major supplier of private label value-added seafood products to North American food retailers and foodservice distributors.  High Liner Foods is a publicly traded Canadian company, trading under the symbol HLF on the Toronto Stock Exchange.

About Rubicon Resources, LLC

Rubicon Resources, LLC is a seafood company based in Culver City, California and a leading importer of sustainable seafood into the U.S. market.  It specializes in frozen shrimp responsibly sourced from Southeast Asia and sold under the private labels of major U.S. grocery retailers.  Rubicon's commitment to sourcing seafood from sustainable, ethical and responsible resources ensures only the highest quality product reaches the consumer.

This document contains forward-looking statements. Forward-looking statements can generally be identified by the use of the conditional tense, the words "may", "anticipate", "will", "believe", "expect", "continue", or the negative of these terms or variations of them or words and expressions of similar nature.  Specific forward-looking statements in this document include, but are not limited to expectations with respect to: anticipated financial performance including sales and earnings growth; and synergies and levels of accretion based upon assumptions including our ability to successfully integrate the acquisition of Rubicon Resources, LLC.  These statements are based on a number of additional factors and assumptions including, but not limited to: seafood availability, demand and pricing; product pricing, including the cost of raw materials, energy and supplies; operating costs; plant performance; the condition of the Canadian and U.S. economies; our ability to attract and retain customers; required level of bank loans and interest rates; income tax rates; and our ability to attract and retain experienced and skilled employees.  The statements are not a guarantee of future performance.  By their nature, forward-looking statements involve uncertainties and risks that could result in the forecasts and targets not being achieved.  Readers are cautioned not to place undue reliance on forward-looking statements, as actual results may differ materially from those expressed in such forward-looking statements.  We include in publicly available documents filed from time to time with securities commissions and The Toronto Stock Exchange, a discussion of the risk factors that can cause anticipated outcomes to differ from actual outcomes.  Except as required under applicable securities legislation, we do not undertake to update forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf, whether as a result of new information, future events or otherwise.

The Company reports its financial results in accordance with International Financial Reporting Standards ("IFRS").  Included in this media release is a non-IFRS financial measure, "EBITDA", as a supplemental indicator of operating performance.  Please refer to the Company's MD&A for the thirteen weeks ended April 1, 2017 for the definition of EBITDA and the reconciliation to measures that are found in our consolidated financial statements.

The Company believes this non-IFRS financial measure provides useful information to both management and investors in measuring the financial performance and financial condition of the Company.  This measure does not have a standardized meaning prescribed by IFRS and, therefore, may not be comparable to similarly titled measures presented by other publicly traded companies, nor should it be construed as an alternative to other financial measures determined in accordance with IFRS.

For further information about the Company, please visit our website at www.highlinerfoods.com or send an e-mail to [email protected].

SOURCE High Liner Foods Incorporated

Heather Keeler-Hurshman, CPA, CA, Vice President Investor Relations and Corporate Performance, High Liner Foods Incorporated, Tel: [phone], [email protected]