Phillips Foods Wins Process for Purchase of South Shore Seafoods Group

Phillips Foods wins the process for purchase of the assets of South Shore Seafoods Group of Companies, a leading Canadian seafood processor & distributor; In progress for completing the acquisition in the coming weeks. GT Securities served as exclusive financial advisor to Phillips.

LOS ANGELES, March 13, 2024 /PRNewswire-PRWeb/ -- GT Securities, Inc. ("GTS") announced today that an affiliate of its client, Phillips Foods Inc., a Baltimore, Maryland - based leading global processor and distributor of branded seafood products ("Phillips"), has been awarded the winning bid to acquire the assets of South Shore Seafoods Group of Companies ("SSS") during a CCAA restructuring process. GT Securities served as the exclusive financial advisor to Phillips.

SSS was a leading seafood processor and wholesale distributor in Canada and the U.S. With annual revenues reaching nearly C$300MM recently, it supplied high quality lobster products to some of the largest retailers, restaurant groups, and food distributors across North America and around the world. SSS has four plants in the province of Prince Edward Island, Canada, as well as holding tanks in Nova Scotia, and a buying station in Maine, USA. Difficult market conditions for the seafood industry in the Maritimes region in Eastern Canada over the last 2 years, and tight liquidity for adequate financing, forced SSS in September 2023 to seek restructuring under the Canadian CCAA regulatory process.

Phillips has six large plants in southeast Asia and over 2,500 employees, is a global leader of branded seafood products with an over 100-year history and has been seeking to expand its business and product lines into Canada as part of its strategy to secure an important sourcing for lobster and snow crab. The assets of SSS present an excellent opportunity to establish a significant procurement and processing base for Phillips' products, capitalizing on its recent acquisition of a snow crab processing facility in the nearby province of New Brunswick, Canada. Phillips' management team sees numerous synergies between its existing operations in the US, Asia and SSS assets in Canada, enabling Phillips to continue its growth plans while optimizing new opportunities that lie ahead.

Phillips and SSS both have a long history of supporting their local plants' fishing communities, which Phillips intends on continuing as part of its strategy of building solid relationships with its workforce and the fishermen supplying products. Phillips intends to partially rely on the expertise and knowledge base of SSS prior senior management, as well as continue to utilize and support its loyal employee base.

GTS Managing Director Avi Suriel led the SSS transaction on behalf of Phillips, with his team including Vice President Jeff Dillman. Mr. Suriel has over 25 years of experience in mergers and acquisitions and corporate finance, including tenure with leading Wall Street firms. "This transaction represents a game changer in Canada's Maritimes seafood industry - for the first time in decades, a global seafood leader is about to enter the market introducing uniquely produced, value-added snow crab and lobster products, based on their proprietary pasteurization technique; this shift presents unique advantages versus wholesale frozen products sales which are commonplace in the region today, but offer little differentiation and lower margins," commented Suriel. "The combination of SSS asset base, robust production capacity and procurement sources, coupled with the unique technology, products, marketing ability and geographical reach of a global leader like Phillips, puts their platform in Canada at a distinct advantage over its competition, and positioning it for great success in the next few years".

Steve Phillips, Chairman and CEO of Phillips said: "Avi and Jeff of GTS did a superb job identifying the opportunity for our firm, as well as guiding us confidently, with a dedicated effort and an impressive knowledge base, through a very complicated CCAA process. Coming up with a creative deal structure and coordinating the dialogue with the court monitor, as well as negotiations with the various SSS creditors, were executed expertly, with authority and professionalism. We were thrilled with the opportunity to collaborate with an accomplished financial advisor such as GTS and look forward to a continued productive relationship with Avi and his team."

Dean Flowers, President and CFO of Phillips added, "Avi and Jeff led this process for us professionally and effectively, and were able to find and negotiate with a leading Canadian bank for funding a portion of the transaction and to committing a sufficient Working Capital line of credit facility to our newly created Canadian platform, which will be critical to put SSS former operations back on top again. Their leadership in running the process while collaborating with our team members, as well as the myriad legal and financial advisors who were involved, was key to the success of the project and highlight the top quality, innovative mind and professionalism they represent".

Deloitte Restructuring Inc. ("Deloitte") is the Court Appointed Monitor of SSS and managed the sale and investment solicitation process. Deloitte commented that it was "pleased with the results Avi and Jeff were able to achieve by bringing Phillips to the process, helping maximize creditors' recovery, and a "thinking-outside-the-box" mentality which helped overcome many obstacles in such a complex transaction. We look forward to closing the SSS transaction and to working with GTS team again on future projects."

Ryan Gillcash, Managing Director at Bank of Montreal Corporate Finance Division("BMO"), which is finalizing a loan package as part of the transaction's financing, commented: "It's evident the GT Securities team, headed by Avi Suriel, has extensive experience in the seafood industry. Their team came up with a well thought-out financing structure based upon a well-founded financial projection for the newly formed Canadian company. Finding this optimal mix of equity and debt is paramount to success in a fast-evolving industry like this. Avi and his team turned to BMO, recognizing our leading position in financing and supporting the seafood industry and together we were able to showcase our bench strength. We look forward to continuing to work towards a successful outcome in supporting Phillips' endeavors in Canada and elsewhere, as well as cooperating with GT Securities on other financing opportunities that arise".

Aird & Berlis (Toronto) served as legal advisor to Phillips, with Grant Thornton LLP (Canada) providing accounting guidance; Deloitte is the Court Appointed Monitor of SSS, Norton Rose Fulbright (Canada) served as legal counsel for TD Bank, and Cox & Palmer acted as legal counsel for Deloitte.

About Phillips Foods

Phillips is a leading processor and distributor of seafood products. Headquartered in Baltimore, MD, the Company has two U.S. and six Asian plants with an enviable co-packer network, employing over 2,500 people globally. With various product offerings from crab to barramundi fish, the Company sells its products to a diverse client base including foodservice, leading food retailers and club stores. Philips was founded in 1914, and its operations today also encompass U.S. restaurants and franchise units serving fine seafood products. For more information, please visit www.phillipsfoods.com.

About GT Securities

GT Securities, Inc., based in Los Angeles, California, is a full-service investment banking firm that raises equity (primary and secondary) and debt (secured and unsecured) capital and executes upon acquisition, divestiture, and merger transactions for companies of all types and sizes. GTS' global network of investment banking professionals have completed hundreds of transactions for clients across a diverse array of industries and geographies. The company is registered as a broker-dealer with the U.S. Securities and Exchange Commission (SEC) and is a member of FINRA and SIPC. For more information, visit www.gtsecurities.net.

Media Contact

Avi Suriel, GT Securities Inc., 1 (310) 846-5024, [email protected],  https://gtsecurities.net/ 

Jeff Dillman, GT Securities Inc., 1 (949) 698-8293, [email protected], https://gtsecurities.net/ 

SOURCE GT Securities Inc.