Thai Union Frozen Inks Deal to Acquire Bumble Bee for $1.5 Billion

Updated on

Thai Union Frozen Products Public Company Limited (TUF) signed a binding agreement to acquire Bumble Bee Seafoods for $1.51 billion to boost its revenue. Thai Union Frozen is the world’s largest producer of canned tuna.

Thai Union Frozen expects revenue to increase 25%

According to Thai Union Frozen, the transaction is valued at 8.6 times based on estimated EBITDA for 2014. It will be immediately accretive to its earnings and cash flows, and expected to increase the company’s revenues by 25%.

The acquisition allows Thai Union Group to improve its operating efficiencies in raw material sourcing and production. It will also advance the company’s innovation and new product development in North America.

In a statement, Mr. Thiraphong Chansiri, president and CEO of Thai Union Frozen said the acquisition of Bumble Bee Seafoods is the largest deal in the history of the company.

Mr. Chansiri added, “Bumble Bee Seafoods is a leading player in North American shelf-stable seafood; combining the business with Thai Union Group will lower costs, improve efficiency, and create the global leader in the shelf-stable seafood space. Our deep commitment is to define the future of innovative seafood products for many generations to come”.

Bumble Bee Seafoods is the largest branded shelf-stable seafood company in North America. Its brands include Brunswick and Sweet Sue. It is privately owned by Lion Capital, a pan-Atlantic private equity firm.

Bumble Bee generated annual sales of approximately $1 billion and EBITDA of around $145 million for 2014. Mr. Chansiri estimated that the acquisition could help increase the sales of Thai Union Frozen to $5 billion.

A natural combination based on existing synergies

Mr. Chris Lischewski, president and CEO of Bumble Bee Seafoods believed that the deal with Thai Union Frozen is a natural combination because of the existing synergies between the companies.

“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 uphold the indispensable role as one of the world’s leaders in providing responsibly harvested and processed seafood,” said Mr. Lischewski.

On the other hand, Lyndon Lea, a partner at Lion Capital commented, “We are particularly pleased to have found a strategic home for Bumble Bee Seafoods with the proven expertise of Thai Union.” He believed that the company is uniquely qualified to build the growth and prosperity of Bumble Bee Seafoods further in the future.

The transaction is subject to customary closing condition and regulatory approvals in the United States. Thai Union Frozen and Bumble Bee Seafoods expect to close the deal in the second-half of 2015.

Signup to ValueWalk!

Get the latest posts on what's happening in the hedge fund and investing world sent straight to your inbox! 
This is information you won't get anywhere else!