Clearwater headed for privatization

HALIFAX—Clearwater Seafood has announced that the company is going private.

Units in the publicly traded income fund are being bought back for $4.50 each by Clearwater Fine Foods, one member of the consortium behind the proposed $40 million deal.

Owners John Risley and Colin MacDonald made the company public six years ago, issuing shares and raising $200 million in the process.

The share buyback price of is 32 per cent more than the average closing price in the previous 20 days of trading leading up to the privatization announcement in mid-August.

For the deal to go ahead, two-thirds of unitholders must agree to the sale at a special meeting to be held on Sept. 22.

The deal is all but assured as the consortium, controlled by Risley, MacDonald and his brother, Mickey, along with another investor, already have 68 per cent of the company and have agreed to support the purchase terms.

On the same day as the privatization announcement, Clearwater released its second quarter results. Both sales and profits dropped between April and June to $69 million and $13 million respectively.

In the second quarter of 2007, sales were $75 million while profits came in at $16 million.

Founded in 1976, Risley and MacDonald started Clearwater by selling seafood out of the back of a pickup truck. 

Clearwater sells scallops, lobster, clams, shrimp, crab and fish, and is currently traded on the Toronto Stock Exchange.