A “first step” for Indigenous inclusion: First Nation coalition purchases Clearwater Seafoods in CA$1 billion deal

19 Nov 2020 --- Clearwater Seafoods, Atlantic Canada’s largest wild seafood company, has been jointly acquired by Premium Brands and a Mi’kmaq First Nations coalition led by Membertou First Nation (participating communities).

The transaction is valued at approximately CA$1 billion (US$750 million), including debt.

Chief Terry Paul of Membertou First Nation tells FoodIngredientsFirst that this represents a “first step” for the inclusion of First Nations people in the broader Canadian food system. 

Clearwater states that this collective First Nations investment represents the single largest investment in the seafood industry by any Indigenous group in Canada.

The structure and present management of Clearwater, which is based in Nova Scotia, will stay the same. In the long-term, Paul envisions Mi’kmaq being integrated into the company. “This could be in roles from being the deckhand to potentially being the CEO.”

The participating communities and Premium Brands have agreed to acquire all of the issued and outstanding common shares of Clearwater and the units issued under various Clearwater equity compensation plans for CA$8.25 (US$6.19) per share. 

Premium Brands will raise CA$250 million (US$188 million) of new equity capital by way of a CA$200 million (US$150 million) bought deal public offering and a CA$50 million (US$38 million) concurrent private placement with CPP Investments.All three organizations share a common long-term optimistic vision for the future of sustainable wild-catch seafood products.

Harnessing synergies
Clearwater details that the transaction delivers a strong platform for synergistic growth – both domestically and internationally – by enabling all three parties to leverage each other’s complementary strengths. 

These include Clearwater’s global distribution infrastructure and access to highly valued wild-catch seafood products and the participating communities’ access to unique sources of highly valued wild-catch seafood products.

Meanwhile, Premium Brands brings expertise in value-add product creation, brand development and extensive customer relationships in Canada and the US. 

Additionally, all three organizations share a common long-term optimistic vision for the future of sustainable wild-catch seafood products. 

The partnership between Premium Brands, the participating communities and Clearwater creates a long term “made in Canada” structure, states Clearwater.

“This will contribute to the preservation and enhancement of Canada’s national seafood resources for the benefit of First Nations, the stakeholders of Premium Brands and Clearwater, as well as for all Canadians.”

There is also already a seafood company operated by Membertou First Nation. However, Paul states that this inshore fishery will not be connected to Clearwater, which is an offshore fishery. 

A long history with fishing
Paul explains that fish is a significant part of Membertou First Nation’s culture. “We’ve been here for 30,000 years and I believe we were fishing when we first arrived.”

“Unfortunately, we have traditionally been left out of the business and economics of fisheries to a very great extent. We were kept out of the waters because of the rules and laws that circumvented our treaties, which were ignored for many hundreds of years,” he says. 

In addition to becoming 50 percent owners of Clearwater, Mi’kmaq will also hold all of Clearwater’s Canadian fishing licenses within a fully Mi’kmaq-owned entity.

Looking ahead, Paul states that if a new acquisition opportunity arises that is feasible, it will be considered “very seriously.” Fishing is a significant part of Membertou First Nation’s culture.

A transformational investment
The participating communities are investing in Clearwater via FNC Holdings, a new legal entity formed by Membertou and Miawpukek First Nation. 

All First Nations in Nova Scotia, along with Miawpukek First Nation from Newfoundland and Labrador, were provided the opportunity to participate in the collective investment.

Other Mi’kmaq communities including Paqtnkek, Pictou Landing, Potlotek, Sipekne’katik and We’koqma’q have confirmed their intentions to participate with Membertou and Miawpukek in this investment.

These groups will continue to advance the implementation of treaty rights with the government of Canada. 

However, commercial investments in the seafood sector are a strategic investment to advance the prosperity of the communities and position them as equal participants in the commercial economy. 

The impact of this “transformational” investment will be felt across Mi’kmaq communities in Nova Scotia and Newfoundland and Labrador for generations to come, the participating communities state.

By Katherine Durrell