If things go according to plan True North Seafood, a subsidiary of Cooke Aquaculture of New Brunswick, will be expanding its presence in the United States with the purchase of Mariner Seafoods of New Bedford, Massachussetts.
Seafood news website seafood.com reported on Monday that Mariner Seafoods had filed for Chapter 11 bankruptcy protection, after defaulting on its revolving $10 million (USD) loan from Wells Fargo.
According to Seafood News, True North and Mariner have entered into an asset purchase agreement, with True North agreeing to pay up to $2.2 million (USD) of Mariner’s accounts receivable and another one-half million USD towards the costs associated with the purchase.
In the Chapter 11 bankruptcy filed with the Massachussetts Bankruptcy Court, Mariner Seafoods also cited True North Seafoods as the ‘stalking-horse’ bidder.
Bankrupt companies often choose a company to make the first bid on the firm’s assets to discourage low-ball offers. The friendly bidder has to spend some money doing research to establish a price and is often reimbursed its costs or given first crack at negotiating which assets and liabilities it would take on from the seller. If another bidder is successful, there is sometimes a penalty for walking away from the first bid.
Joe Richardson, vice president of communications for parent Cooke Aquaculture, told SaltWire on Tuesday that True North is optimistic, “It is our intention to acquire the company. We’ve been working with them for the last number of months on the acquisition and we are confident that we will be able to secure the jobs that come with the company and have a seamless transition for customers and vendors from Mariner to True North.
“We expect that transition to take place over the next number of weeks.“
Mariner Seafoods is a fish processing company, with about 130 employees at two locations in New Bedford, MA. They process both wild and farmed seafood products, for wholesale and retail customers in the New England and North Eastern U.S. markets.
“This would provide True North Seafood the opportunity to grow our wild catch and farmed salmon customer base in the U.S. northeast,” said Richardson.
He added that Cooke already has a strong presence in the United States, with a salmon farm and processing facility in Maine, and Wanchese Fish Co. in Suffolk, Virginia.
If they are successful in acquiring Mariner Seafood, said Richardson, those product lines would then fall under the True North seafood brand, which is Cooke’s flagship brand for all of its cooked products.
Richardson added True North is hopeful the Chapter 11 court process can be settled over the next few weeks.
He added that with the number of jobs involved with Mariner Seafoods, there may be a greater sense of urgency by the court to have the matter settled soon.
True North’s parent company, Cooke Aquaculture, has annual sales of well over $2 billion and produces throughout Atlantic Canada as well as on the West Coast. It has been acquiring seafood operations around the world.
Last year it bought Seajoy Seafood Corp., a family-owned shrimp farming operation in Honduras and Nicaragua.
Cooke Aquaculture operates aquaculture and seafood processing companies globally under its brands True North Seafoods, Icicle Seafoods, Grupo Culmarex, Omega Protein and the Cooke Aquaculture brand name.
