American Seafoods Acquisition

Situation

The American Fisheries Act of 1998 ("AFA") put into place an allocation system for the Bering Sea Pollock catch that allowed harvesting to be accomplished in a substantially more efficient and profitable manner. In addition, the AFA allocated a portion of the Pollock resource to native Alaskans. It also set a date after which foreign ownership in the offshore fishery would be restricted to a minority position. Passage of the AFA served as a catalyst for the sale of the largest industry's participant, American Seafood Company ("ASC"), which was foreign owned. Because Coastal Villages Region Fund ("CVRF") had the benefit of one of the largest allocations of Bering Sea Pollock quota, it was a natural strategic partner in the buyout of ASC.

ZS Role

Zachary Scott was engaged by CVRF to evaluate the economics of participating in the buyout of ASC and to advise CVRF's management and Board on matters of pricing, structure, and governance. Subsequent to the buyout, ZS advised CVRF with regard to a potential sale of the business and a recapitalization of the business.

Results

CVRF participated with Centre Partners and ASC's management in the successful acquisition of ASC. Several years later, a recapitalization of the business enabled CVRF to recover its original investment and a substantial gain, while increasing its ownership position in the company.

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