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Cooke Inc buys Omega

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    Posted: 06 October 2017 at 3:30pm
http://omegaprotein.com/cooke-inc-agrees-acquire-omega-protein-corporation-22-00-per-share/

• Omega Protein’s Stockholders to Receive $22.00 Per Share in Cash
• Transaction Valued at Approximately $500 Million
• Transaction Represents Key Strategic Addition for the Global Seafood Company

SAINT JOHN, NEW BRUNSWICK, CANADA & HOUSTON, TEXAS – October 6, 2017 – Cooke Inc. (“Cooke”), a New Brunswick company and parent of Cooke Aquaculture Inc., and Omega Protein Corporation (“Omega Protein” or the “Company”), a nutritional product company and a leading integrated provider of specialty oils and specialty protein products, today announced that they have entered into a definitive agreement (the “Merger Agreement”) under which Cooke will acquire all outstanding shares of Omega Protein for $22.00 per share in cash. The transaction price represents a premium of 32.5% to Omega Protein’s closing share price on October 5, 2017. The Merger Agreement has been unanimously approved by the Board of Directors of each of Omega Protein and Cooke.

“We are very pleased to sign this agreement with Omega Protein,” said Glenn Cooke, CEO of Cooke Inc. “Omega Protein will provide us with another platform in Cooke’s growth strategy through further diversification in the supply side of the business. We believe this will be a very good fit between our two cultures. Omega Protein has a 100-year history with an experienced and dedicated workforce, which we value, and a tradition of operating in small, coastal towns and communities that we share. Their focus on sustainable aquaculture and agriculture and the production of healthy food is also a great fit with our experience and culture.”

Cooke carries on the business of finfish aquaculture globally through its wholly-owned subsidiary Cooke Aquaculture Inc. The New Brunswick, Canada based Cooke family also has significant investments in wild fisheries globally through their ownership of Cooke Seafood USA, Inc. and Icicle Seafoods, Inc. Cooke Aquaculture Inc. is an aquaculture corporation founded in Blacks Harbour, New Brunswick, Canada with salmon farming operations in Atlantic Canada (operated by its affiliate, Kelly Cove Salmon Ltd.), the United States (Maine and Washington), Chile and Scotland, as well as seabass and seabream farming operations in Spain. In 2015, Cooke Seafood USA, Inc. was created, and grew rapidly through the acquisitions of Wanchese Fish Company, Inc. in the USA and the assets of Fripur S.A., the largest fishing company in Uruguay. The Cooke family also acquired Icicle Seafoods, Inc. in 2016. The addition of Omega Protein serves as a perfect strategic piece for the Cooke family of companies.

“We are excited about the agreement, which we believe recognizes the value of Omega Protein’s successful, 100-year-old fishing business and also provides stockholders with an immediate premium,” said Bret Scholtes, President and CEO of Omega Protein. “Cooke is a family owned company and in many ways, reminds us a lot of ourselves and this agreement is the perfect fit for the two companies. Cooke is a highly-regarded and responsible leader in the global fishing and seafood industry.”

Transaction Highlights

The transaction – which is expected to close near the end of 2017 or early in 2018 – is subject to the approval of Omega Protein stockholders, certain regulatory approvals and other customary closing conditions.

BMO Capital Markets is providing committed financing for the transaction.

Advisors

BMO Capital Markets is serving as the buy-side financial advisor, Kelley Drye & Warren LLP is serving as legal counsel and Deloitte LLP is acting as financial and tax due diligence advisor to Cooke.

Jones Day is serving as counsel to BMO Capital Markets, and Morgan, Lewis & Bockius LLP is serving as legal counsel to Cooke, in connection with the committed financing.

J.P. Morgan Securities LLC is acting as exclusive financial advisor to Omega Protein and provided a fairness opinion to its Board of Directors. Vinson & Elkins L.L.P. is serving as legal counsel to Omega Protein.

About Omega Protein Corporation

Omega Protein Corporation (NYSE: OME) is a century old nutritional product company that develops, produces and delivers healthy products throughout the world to improve the nutritional integrity of foods, dietary supplements and animal feeds. Omega Protein’s mission is to help people lead healthier lives with better nutrition through sustainably sourced ingredients such as highly-refined specialty oils, specialty protein products and nutraceuticals.

The Company operates seven manufacturing facilities located in the United States, Canada and Europe. The Company also operates more than 30 vessels to harvest menhaden, a fish abundantly found in the Atlantic Ocean and Gulf of Mexico.

About The Cooke Family of Companies

The Cooke Family of Companies includes global aquaculture divisions under Cooke Inc. and its wholly-owned subsidiary Cooke Aquaculture Inc. as well as a Canadian aquaculture division operated by its affiliate, Kelly Cove Salmon Ltd. The Cooke family of companies also includes seafood divisions under Cooke Seafood USA, Inc. and Icicle Seafoods, Inc. Cooke Aquaculture is a vertically-integrated aquaculture corporation based in Blacks Harbour, New Brunswick, Canada with salmon farming operations in Atlantic Canada (operated by its affiliate, Kelly Cove Salmon Ltd.), the United States (Maine and Washington), Chile and Scotland as well as seabass and seabream farming operations in Spain. Aquaculture operations include land-based juvenile production, marine farms, processing and distribution facilities and a global sales and marketing team as well as a full value chain service and supply sector.

In 2015, the Cooke family entered the wild fishery, creating Cooke Seafood USA, Inc. which acquired Wanchese Fish Company, Inc. In 2016, the family expanded its investments in the wild fisheries through their acquisitions of Icicle Seafoods, Inc., in the USA and the assets of Fripur S.A., the largest fishing company in Uruguay. The Cooke family of companies employ approximately 5,000 people world-wide.

Fishing and farming isn’t just what we do. It’s who we are. What started as an undying family passion for the sea, passed down from one generation to the next, has been transformed into a global company. Today, the Cooke family of companies produce some of the very best seafood in the world.

Our mission is to be a global seafood leader driven by an innovative team that delivers superior products, service, and value to our customers in a safe and environmentally sustainable manner.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote Rick Quote  Post ReplyReply Direct Link To This Post Posted: 06 October 2017 at 3:44pm

http://www.undercurrentnews.com/2017/10/06/omega-deal-a-big-piece-of-cookes-vertical-integration-plans/

“With Omega Protein, we would be a customer of theirs and now to have them be part of the Cooke family of companies it’s a whole new dimension for us," Brown said. "We’re now involved in the actual feed ingredients and the fisheries."

When asked if the Omega deal meant that Cooke's vertical integration plans were complete in North America, Brown wouldn't rule it out.

“I would never say that we’re done. There’s lots that you can do,” he said, adding a decision to use Omega's fishmeal and fish oil in fish feed for Icicle's operations hasn't been made. 

“Those are decisions that will have to be made over the coming months or longer,” he said.

Brown also wouldn't rule out further expansion into fishmeal and fish oil in Europe and South America either where the company is currently not making its own feed.

“It would be too early to comment on that,” he said.

With the Omega deal, Cooke picked up a company with 38 vessels, 27 spotter aircraft and has three fishmeal and fish oil processing plants in Louisiana, Mississippi and Virginia. 

Sales of fishmeal, fishmeal additives known as fish solubles, and fish oil made up two-thirds of Omega's $390m revenue in 2016.  

The company’s total menhaden catch fell by 14% in 2016 to 413,617 metric tons, which meant that fishmeal production fell by 12.5% year-on-year to 110,568t.

However, as oil yields from its fish were nearly 30% above the five-year average, Omega was able to boost its production of crude and refined fish oils by 21% to 45,687t in 2016.

Overall, total tons sold of Omega’s fishmeal, oil and solubles products -- sales can include some 2015 inventories -- rose by 19% y-o-y, and average revenues per ton rose by $2 to $1,455t. This contributed heavily to the company’s overall 8.6% revenue growth.

And its menhaden quotas are seen as increasingly valuable as that biomass continues to receive regulator's blessing as a sustainable stock.

Ignacio Kleiman, managing partner of US-based, food industry-focused independent investment banking firm Antarctica Advisors International, said that the deal was a "very interesting strategic move" for Cooke. 

That's in part because of the synergies between salmon farming and fishmeal but also because Cooke may be able to achieve savings through combined management of Wanchese and Omega's vessel fleets.

Kleiman, who said that Omega had been "undervalued" by the market, said his firm advised several minority shareholders in Omega on the Cooke deal.

The other third of Omega's revenues -- $128m in 2016 -- came from its human nutrition business, which  manufactures dairy protein products, specialty oils and other nutraceutical ingredients. It has incurred losses for years and faces possible sale or closure, Omega said earlier this year.

In March 2016, following public pressure from investors Wynnefield Capital Partners, Omega announced it would exit the concentrated omega-3 oils business, closing a plant in Batavia, Illinois. And in March this year, Omega said that it was undertaking a “strategic review” of its options for the entire human nutrition business. 

Brown said that Cooke would review that aspect of the business.

“We’re going to have to evaluate that segment and determine whether that fits with Cooke’s product portfolio and our long-term goals,” he said.



Edited by Rick - 06 October 2017 at 3:48pm
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Post Options Post Options   Thanks (0) Thanks(0)   Quote bmac Quote  Post ReplyReply Direct Link To This Post Posted: 10 October 2017 at 9:47am
"Their focus on sustainable aquaculture and agriculture and the production of healthy food is also a great fit with our experience and culture.” [Regardless of the consequences]

"Omega Protein’s mission is to help people lead healthier lives with better nutrition through sustainably sourced ingredients such as..." [Regardless of the consequences]

Name one, just one, reduction fishery in existence or in the past that hasn't resulted in calamity. Perhaps there's one or two, but that's generally not how the business model works. West coast sardine reduction fishery in the mid 20th Century collapsed sardine and anchovy stocks and disrupted the entire food chain from California to Washington. It took decades to come back to a mere fraction of what it was. When they fished it out, they sent their boats and gear down to Chile and Peru and fished those stocks completely out. Sustainable my arse.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Ray Brown Quote  Post ReplyReply Direct Link To This Post Posted: 10 October 2017 at 11:58am
What is going on?

It wasn't that long ago that it was illegal for anyone other than an American National to hold a fishery permit to be used in American waters.

Who, and when did that rule change? Or is Cook buying these American companies to somehow circumvent this rule?
Some trawl operator will be forced to change in order to reduce bycatch. If you worry about that more than stopping the bycatch then the resource is secondary to you. Recovery has one less advocate.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote chriselk Quote  Post ReplyReply Direct Link To This Post Posted: 10 October 2017 at 5:31pm
Observers, observers, observers.  

Because there is or was only one company, their catches and money are not public.  Now we have a foreign company fishing inside our waters.  We kicked out foreign factory ships from within 200 miles years ago and now we are letting them back in.

Sleazy move.


Edited by chriselk - 12 October 2017 at 12:22pm
The above comments are my personal opinion and do not represent those of any organizations or agencies I may be a member of.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Ray Brown Quote  Post ReplyReply Direct Link To This Post Posted: 12 October 2017 at 10:34am
In order for Cooke to come into NC the threshold standard of SAV presence had to be lowered because if the old standards were used there would not have been enough available bottom in our sounds to have made NC interesting to them.

So while the usual suspects were changing the law for the NCFA tacitly endorsed Cooke aquaculture, do not forget to ask what scientist or group of scientist came to the conclusion that lower SAV standards could be adopted by NC just in time for Cooke to be welcomed in.

Remember, they needed changes in SAV standards along with changes in how bottom leases are granted and monitored as well as the allowance of pens and non native species in the water, but first and foremost they needed some scientist to conclude that you can put oysters and pens on SAV beds without hurting the habitat or other species that use SAV for various stages of their lifecycle. (Submerged Aquatic Vegetation)

Amazingly everything they needed for Cooke just happened. Amazing. What if... Some of this accomplishment that obviously was done for commercial purposes and private profiting was financed by recreational license money?

Would you, or should you as a license holder be upset?


Some trawl operator will be forced to change in order to reduce bycatch. If you worry about that more than stopping the bycatch then the resource is secondary to you. Recovery has one less advocate.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Rick Quote  Post ReplyReply Direct Link To This Post Posted: 12 October 2017 at 11:40am
Say it ain't so Ray!  Say it ain't so!!

Sounds like status quo-  NCDMF leading our research universities around by those grant rings in their noses and stealing from our CRFL funds to pay for those grants that benefit commercial fishing interests.

This is interesting-
http://www.seattletimes.com/seattle-news/environment/fish-farming-company-offered-money-for-lummi-nations-silence-about-net-pens-letters-show/

Cooke Aquaculture offered the Lummi Nation a premium price for the fish it caught that had escaped from Cooke pens, in exchange for keeping silent about a ban on net pen Atlantic salmon farms in Washington. The tribe called the offer “insulting.”

I guess if you have enough money, anything is possible...except when you're dealing with a group of people that have pride and believe in ethical conduct. 


Edited by Rick - 12 October 2017 at 12:08pm
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