Centre Partners buys Canadian income fund for $600m

The New York- and Los Angeles-based firm has acquired Connors Brothers Income Fund, which sells canned seafood products under brands like Bumble Bee, Clover Leaf and Brunswick. Connors Brothers is one of many Canadian income funds taken private since the Canadian government announced a tax increase starting in 2011.

Centre Partners has acquired Canada-based Connors Brothers Income Fund, North America’s largest branded seafood company, for a total enterprise value of $600 million. 

Connors sells canned tuna, salmon, sardine and other seafood products marketed under brands including Bumble Bee, Clover Leaf, Brunswick, Snow’s and Beach Cliff. The company’s senior management team will own a “significant” stake in the business.

Centre Partners worked with several partners to structure the acquisition, including Wells Fargo, whichunderwrote a $350 million senior revolver and term loan. Ares Capital structured and arranged a $135 million senior subordinated debt placement and co-invested in the equity as part of the deal. Falcon Investment Advisors structured a $50 million preferred equity tranche while also making a substantial equity co-investment.

Centre Partners has worked with Connors’ management team in the past. The firm purchased Bumble Bee from ConAgra in 2003, and merged it with Connors in April 2004.

“We …believe there is significant growth for seafood and, in these uncertain economic times, canned seafood in particular,” Scott Perekslis, senior partner with Centre Partners, said in a statement.

Many Canadian income trusts like Connors have been sold in the past few years since the Canadian

Canned tuna:
buyout target

government decided in 2006 that the trusts would be subject to an additional 34 percent tax starting in 2011.

Nautic Partners, a US private equity firm, acquired Canada Cartage Diversified Income Fund for C$140 million last June. Last April, New York-based Caxton-Iseman Capital purchased KCP Income Fund, part of consumer products firm KIK Custom Products, for C$804 million.

Centre Partners is investing from its fifth fund, which has about $880 million in committed capital. The firm focuses on healthcare, industrial products and services, consumer, energy, media, restaurants, retail and aviation services sectors.

The firm invests between $15 million and $85 million in portfolio companies.