TUF acquiring 100% of US seafood company Bumble Bee

Bumble Bee Seafoods is privately owned by a private-equity firm Lion Capital. 

TUF is acquiring the company for a total purchase price of US$1.51 billion (Bt49.6 billion). 

The acquisition of Bumble Bee Seafoods will allow Thai Union Group to improve operating efficiencies in the areas of raw-material sourcing and production, as well as advancing in innovation and new-product development, particularly in North American markets, TUF says.

Thiraphong Chansiri, president and chief executive of TUF, said the deal was the largest acquisition in the history of the company and one of the most exciting external growth propositions. Upon completion, the transaction will be immediately accretive to TUF’s earnings and cash flows and will increase group revenues by about 25 per cent. 

Combining the Bumble Bee business with Thai Union Group will lower costs and improve efficiency. “Our deep commitment is to define the future of innovative seafood products for many generations to come,” he said.

Thai Union has been present in the United States for more than 17 years, and says this acquisition is a sign of the company’s continued commitment to the second-largest seafood market in the world. 

“We are a strategic investor with a long-term view of the market,” said the CEO of Chicken of the Sea International, Shue Wing Chan. “We believe that, together, we will be able to reinvigorate the canned-seafood category in North America.”

Chicken of the Sea is owned by the Thai Union Group.

After the deal to buy Bumble Bee is complete, TUF will have a debt-to-equity ratio of more than 1:1. As a result, the company will hold back from further acquisitions next year, Thiraphong said.

“We have to bring our debt ratio below 1:1 before expanding through acquisitions again,” he said. Before the Bumble Bee takeover the company had a debt-to-equity ratio of only 0.8:1.

As of September 30, TUF’s year-to-date revenue was Bt89.89 billion and net profit Bt4.39 billion. Total debt stood at Bt60.4 billion.

Bumble Bee Seafoods, based in San Diego, California, generates annual sales of about $1 billion, and this year’s estimated EBITDA (earnings before interest, taxes, depreciation and amortisation) is $145 million. The company has a workforce of more than 1,300 people, producing and selling canned, pouched and frozen seafood products across the United States and Canada.

Lyndon Lea, partner of Lion Capital, said Thai Union’s acquisition of Bumble Bee Seafoods represented an exciting next step for the development of the business. 

“We are particularly pleased to have found a strategic home for Bumble Bee Seafoods with the proven expertise of Thai Union. Thai Union is uniquely qualified to build even greater growth and prosperity of Bumble Bee Seafoods’ business in the future,” Lea said.

Chris Lischewski, president and CEO of Bumble Bee Seafoods, said he had always believed that Thai Union and Bumble Bee represented a natural combination given the synergies between the two organisations.

“We share a strong vision towards innovation, operational excellence, sustainability and value for our consumers, which is one of the many reasons this combination is good news for our customers, consumers and the industry as a whole. Importantly, we commit to [upholding] the indispensable role as one of the world’s leaders in providing responsibly harvested and processed seafood,” he said.

The closing of the acquisition remains subject to clearance by US antitrust authorities and other conditions set forth in the acquisition agreement. While a definitive closing date cannot yet be determined, Thai Union Group and Bumble Bee Seafoods expect that the transaction will close in the second half of next year.

UBS acted as adviser for TUF on the acquisition. Morgan Stanley and Rothschild acted as financial advisers for Bumble Bee.