Blue Star Foods Corp., through subsidiary John Keeler & Co. Inc., announced Monday it acquired South Carolina-based Coastal Pride Company.
Coastal Pride specializes in importing pasteurized and fresh crabmeat primarily from Mexico and Latin America, and serving North American customers.
The acquisition augments Blue Star's strength in providing Portunus species crabmeat from Southeast Asia; Coastal Pride is strong in its sourcing of Callinectes species crabmeat from Mexico and South America, the company said.
The acquisition was financed through a combination of cash, promissory notes and shares of Blue Star stock.
Newbridge Securities Corporation acted as the exclusive M&A adviser to Blue Star and The Crone Law Group acted as the company’s legal counsel.
“Blue Star has a long-term strategy to build a vertically integrated, geographically diverse, multi-species, sustainable seafood company," said Chairman and CEO John Keeler.
"We believe Coastal Pride has developed tremendous value in their brands, including Lubkin’s Coastal Pride, Lubkin’s First Choice and Lubkin’s Good Stuff, which are known in our industry as premium and well-respected products."
Coastal Pride President Frank Lubkin said the groups will look for synergies across the value chain, but will independently manage the businesses.
How healthy is Blue Star?
In October, Blue Star sounded alarm bells regarding its ability to stay in business.
At the time, the company announced Blue Star CEO and President Carlos Faria left the company, describing his departure as a unanimous decision by the board, according to an August filing with the US Securities and Exchange Commission (SEC). Keeler was appointed to lead the operation by Blue Star's board members.
For the quarterly period that ended in June, Blue Star reported a net loss of nearly $2.2 million (€2 million). The filing said Blue Star accumulated a deficit of around $6.1 million (€5.5 million), a working capital deficit of nearly $2 million (€1.8 million), and "current liabilities" of around $2.9 million (€2.6 million) in stockholder loans.
"These circumstances raise substantial doubt as to the company’s ability to continue as a going concern," the filing said.
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