Halifax-based Clearwater Seafoods announced a billion-dollar deal Monday to sell the company to a partnership between Premium Brands of British Columbia and a coalition of Mi’kmaw First Nations.
It is “the single largest investment in the seafood industry by any Indigenous group in Canada,” said a news release jointly issued by the coalition and Clearwater.
The coalition will be led by the Membertou band in Cape Breton and Miawpukek in Newfoundland and Labrador.
Membertou Chief Terry Paul said the Mi’kmaq will hold Clearwater’s Canadian fishing licences within a fully Mi’kmaq-owned partnership.
“This deal is a transformational moment for all participating communities,” Paul told CBC News. “We will now have access to the offshore fishery from an ownership position.”
The Mi’kmaw coalition will put up $250 million for its share of the purchase and pay for it through a 30-year loan from the First Nations Finance Authority.
“I feel excited about it,” said Paul. “We’re a player now. In order to be in business, you first have to play the game.
“You have to play to win, and we won.”
North America’s shellfish leader
Clearwater is North America’s largest producer of shellfish and holds Canadian harvest licences for a variety of species including lobster, scallop, crab and clams.
It also has harvesting operations in the United Kingdom and South America and a worldwide sales operation.
The deal is being recommended by Clearwater directors and would see shareholders paid $8.25 a share. That’s a 15 per cent premium above the price last week and a 60 per cent premium compared to the price before Clearwater announced it was for sale in March.
The sale is expected to close in the first half of 2021.
“I am very pleased to recommend this transaction. It represents great value for shareholders, leverages the expertise within the company while advancing reconciliation in Canada,” Colin MacDonald, chair of the board of directors of Clearwater, said in a statement.
“I am confident that this transaction will enhance the culture of diversity and sustainable seafood excellence that exists at Clearwater.”
Clearwater CEO Ian Smith said the deal is good for company shareholders and for employees, who will continue to harvest and process shellfish. He said founders John Risley and MacDonald were mindful of employees.
“They wanted to make sure that shareholders got a fair market value for the company. But they also wanted to make sure that they protected the employees of the company and good jobs right here at home in Atlantic Canada,” Smith said Tuesday.
Bringing the Mi’kmaq into an ownership position in offshore fisheries, however, was “historic.”
“I think it demonstrates a model, not the only model, but a model for reconciliation. I think we’re demonstrating that you can create greater opportunity and greater prosperity for Indigenous and non-Indigenous communities here at home, right here in Atlantic Canada,” Smith told CBC News.
Clearwater is also a major buyer of lobster harvested by the inshore commercial fleet.
“We’ll be looking at how we align all of our operations,” Smith said. “We’re in the midst of looking at our operating plans for 2021. This is probably, this transaction is probably going to change how we look at that.”
Smith declined to discuss transaction details beyond the news release, including the financing of the Mi’kmaw purchase.
Other Mi’kmaw bands show interest
The agreement will see the Mi’kmaw coalition and Premium Brands create FNC Holdings to acquire Clearwater shares.
Several other Nova Scotia bands have confirmed their intention to join Membertou and Miawpukek, according to the announcement. They include Paqtnkek , Pictou Landing, Potlotek, Sipekne’katik and We’koqma’q.
Membertou said the purchase will not take away from the First Nation’s current revenues or financial position.
Moderate livelihood fishery not impacted
Paul said the Clearwater deal will not slow the push for a moderate livelihood fishery in Nova Scotia.
Membertou and several other bands have launched or intend to launch self-regulated lobster fisheries.
They are exercising a treaty right recognized by the Supreme Court of Canada, but the move has angered — and even prompted violence — from some non-Indigenous commercial fishermen.
“Our investment in a commercial offshore fishery is completely separate from our commercial inshore and moderate livelihood fisheries,” Paul told CBC News.
“We’re still very incredibly committed to our other fisheries and to our communities on moderate livelihood. This deal does not impact the processes and the discussions taking place in other areas of the fishery.”
‘Globally respected brand’
Federal Fisheries Minister Bernadette Jordan supported the Clearwater sale on Tuesday.
“Our government welcomes collaboration between industry and First Nations to grow our Canadian seafood industry,” her office said in a statement to CBC News. “This project represents a positive step toward building strong partnerships between Indigenous communities and the commercial seafood sector.”
George Paleologou, CEO and president of Premium Brands, praised Clearwater as “a world-class seafood company with a great management team, best-in-class products and a globally respected brand.”
“In partnership with us and the Mi’kmaw First Nations communities, it will become an even stronger business by leveraging the complementary strengths of our three organizations,” added Paleologou.
Clearwater was founded in 1978 by John Risley and Colin MacDonald.
Now in their 70s, they have said the company was put for sale earlier this year as part of succession planning since their children were not interested in taking over the business.