High Liner Signs Agreement to Purchase FPI'S Marketing and Manufacturing Group



    LUNENBURG, NS, Aug. 24 /CNW/ - High Liner Foods Incorporated (TSX:HLF)
today announced it has signed an agreement with FPI Limited and its
subsidiary, Fisheries Products International Limited, to purchase its
marketing and manufacturing business.
    FPI's marketing and manufacturing business consists of its North American
value-added food service and retail frozen seafood businesses. In 2006, the
business had sales of $452.9 million and gross profit of $43.5 million.
    "This acquisition will be an important milestone in pursuit of our vision
to become the leading value-added frozen seafood company in North America.
It's great news for our customers, our consumers, and the employees of both
High Liner and FPI," said Henry Demone, President and Chief Executive Officer.
"This transaction will strengthen and expand our presence in both Canada and
the United States. We will gain a foothold in the important U.S. food service
channel, and add to the variety of our products in both retail and food
service. This move is strategic and consistent with our aim to ensure that
customers and consumers get only the very best value-added seafood products
from around the world."
    High Liner is also entering into agreements with Ocean Choice
International, purchaser of FPI's primary group assets, to allocate
intellectual property and ensure continuity of supply of Atlantic Canadian
seafood from the primary group to the manufacturing and marketing business.
    "The addition of this business is expected to be positive for our
shareholders and accretive to earnings per share in the first twelve months
before one time closing and transition costs," added Mr. Demone.

    
    Major terms of the deal include:

    -   Total cost to High Liner for the acquisition is $158 million (based
        on a High Liner Foods share price of $10.00 and will be adjusted at
        closing based on the market price at that time), made up of a
        purchase price to FPI of $143 million (subject to working capital
        adjustments based on an assumed working capital of $84 million) and a
        payment to Ocean Choice of $15 million;

    -   Payment of purchase price to FPI to be $83 million cash plus the
        issue of 3 million common shares and 1.2 million Series A Preference
        shares of High Liner to FPI. The 1.2 million Series A Preference
        shares will be convertible to 3 million non-voting equity shares to
        be created at the Company's 2008 annual meeting;

    -   The Company has arranged term debt of $53.6 million to partially
        finance the cash portion of the transaction and a $120 million
        working capital facility to fund the balance of the cash portion of
        the purchase price as well as to fund working capital requirements
        and capital expenditures;

    -   In addition to FPI's marketing and sales operations and their
        associated working capital, the assets consist of secondary
        processing facilities in Burin, Newfoundland and Labrador, and
        Danvers, Massachusetts;

    -   High Liner will operate the Burin facility, in accordance with an
        agreement with the Government of Newfoundland and Labrador; and

    -   Once the transaction closes, Newfoundland and Labrador's FPI Act,
        which restricts the sale of FPI's assets, will not apply to High
        Liner or the FPI assets purchased by High Liner.
    

    This agreement must be approved at a special meeting of FPI shareholders
in the coming weeks. The transaction requires regulatory approval in Canada
and the United States, including from competition and anti-trust regulators,
certain third party consents and other customary closing conditions. The
Government of Newfoundland and Labrador must also be satisfied with the terms
of the agreement before it proclaims the amendment to the FPI Act allowing the
sale to proceed.

    CIBC World Markets Inc. acted as financial advisor to High Liner in 
connection with the transaction.

    About High Liner Foods Incorporated

    High Liner Foods Incorporated is one of North America's largest
processors and marketers of prepared, value-added frozen seafood. High Liner's
branded products are sold throughout the United States, Canada and Mexico
under the High Liner(R) and Fisher Boy(R) labels and available in most grocery
and club stores. The Company also sells its High Liner(R) food service
products to restaurants and institutions. The Company is also a major supplier
of private label seafood products to North American food retailers and food
service distributors. High Liner Foods is a publicly traded Canadian company,
trading under the symbol HLF on the Toronto Stock Exchange.

    This document contains forward-looking statements, including sales,
earnings, marketing, and profitability comments for 2007 and beyond. These
statements contain words such as "anticipate", "expect", "could", "should",
"may", "plans", "will", or similar expressions that are based on and arise out
of our experience, our perception of trends, current conditions and expected
future developments as well as other factors. These statements are not a
guarantee of future performance. By their nature, forward-looking statements
involve uncertainties and risks that the forecasts and targets will not be
achieved. For example, whether and to what extent the acquisition will be
accretive and beneficial to shareholders will depend upon several factors,
including synergies to be obtained, the response of our valued customers and
suppliers and future revenues from the acquired business. There can be no
assurance that the proposed transaction will be completed.
    Readers are cautioned not to place undue reliance on forward-looking
statements, as a number of important factors, as discussed herein and in our
other continuous disclosure documents, could cause actual results to 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 thorough discussion of the risk
factors that can cause anticipated outcomes to differ from actual outcomes. We
disclaim any intention or obligation to update or revise forward-looking
statements.
    For further information about the company, please visit our Internet site
at www.highlinerfoods.com or send e-mail to investor@highlinerfoods.com.

    Notice of Conference Call

    High Liner Foods will host a conference call on Friday, August 24, 2007,
at 10:30 a.m. ET (11:30 a.m. AT) to discuss its proposed acquisition of FPI's
Marketing and Manufacturing Group. To access the conference call by telephone,
dial 416-644-3418 or 1-800-731-6941. Please connect approximately ten minutes
prior to the beginning of the call to ensure participation. The conference
call will be archived for replay until Friday, August 31, 2007, at midnight.
To access the archived conference call, dial 416-640-1917 or 1-877-289-8525
and enter the reservation number 21244871 followed by the number sign.
    A live audio webcast of the conference call will be available at
www.highlinerfoods.com. Please connect at least 15 minutes prior to the
conference call to ensure adequate time for any software download that may be
required to join the webcast. The webcast will be archived at the above
website for 90 days.

    %SEDAR: 00001789E




For further information:

For further information: INVESTORS, ANALYSTS AND FINANCIAL MEDIA: Kelly
Nelson, FCA, Vice President Corporate Services and Chief Financial Officer,
High Liner Foods Incorporated, Tel.: (902) 634-8811,
investor@highlinerfoods.com; Lawrence Chamberlain, Investor Relations, The
Equicom Group Inc., Tel.: (416) 815-0700 ext. 257, lchamber@equicomgroup.com;
OTHER MEDIA: Robert Batherson, Tel: (902) 722-3127, Mobile: (902) 478-1685,
robert@colour.ca


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