July 28, 2010

Thailand's major processor and exporter of canned and frozen seafood, Thai Union Frozen Products PCL (TUF), has approved the resolution to acquire 100% of MW Brands (MWB) from Trilantic Capital Partners.

MWB is one of the European leaders in tuna and other ambient seafood products through its iconic brands - John West, Petit Navire, Hyacinthe Parmentier and Mareblu - and holds leading market positions in France, the UK, Ireland and the Netherlands and Italy.

MWB is currently owned by Trilantic Capital Partners, a leading international private equity group with US$3.8 billion of assets under management. Trilantic acquired MWB through a carve out of various entities from the US food producer HJ Heinz in 2006. For the latest fiscal year ended March 31, 2010, MWB generated sales of EUR448 million (US$582.7 million). The book value of its total assets was EUR559 million (US$727.1 million).

TUF will acquire 100% of MWB for an enterprise value of EUR680 million (US$884.5 million) payable in cash. Financing for the acquisition has been fully secured. The transaction is subject to shareholders' approval and anti-trust review from the relevant authorities.

After the completion of the transaction, TUF's tuna processing capacity will amount to half a million tonnes of whole round fish making the combined group one of the largest canned tuna producers in the world.

Based on sales, TUF will be among the largest seafood companies in the world. In addition, TUF will become one of the few truly global and vertically-integrated seafood players with sales, production, and leading brands across Asia, the US, and Europe. The acquisition will increase Europe's contribution to TUF's total sales from 11% to more than one third.

According to TUF president Thiraphong Chansiri the investment will add four processing plants in France, Portugal, Seychelles and Ghana to the existing five processing facilities in Thailand, Indonesia, Vietnam and the US. In addition, the company's fishing fleet will also double in size from 4 to 9 vessels, significantly improving its vertical integration and strategic access to tuna raw material.

Meanwhile, TUF achieved sales of THB68.9 billion (US$2.13 billion) with net profit of THB3.3 billion (US$102.2 million) and EBITDA of nearly THB6.0 billion (US$185.9 million) in 2009. Tuna products accounted for the largest share at 44%, followed by frozen shrimp at 20%, canned seafood at 9%, shrimp feed at 6%, canned sardine/mackerel at 4% and others at 5%.

In its latest Q1 2010 operational results, TUF generated THB16.3 billion (US$505.2 million) in sales with net profit of THB831.2 million (US$25.7 million), up 27.3% year-on-year and 15.8% quarter-on-quarter. The quarterly EPS was THB0.94 (US$0.029).