Omega Protein acquires Bioriginal

BASED in Houston, Texas, Omega Protein Corporation specialises in nutritional products and is a leading integrated producer of omega-3 fish oil and specialty protein products. Its decision to buy the stock of Bioriginal Food & Science Corp. adds plant and marine based specialty oils and essential fatty acids to its portfolio, which Bioriginal supplies to the food and nutraceutical companies in North America, Europe and Asia.  For the fiscal year ended 31 March 2014, Bioriginal generated about $98 million in net revenues.

“Increased sales of nutritional products for direct human consumption is a key component of Omega Protein's business strategy to diversify our business model and increase growth, while decreasing our exposure to commodity based earnings volatility," said Bret Scholtes, Omega Protein's president and CEO. "We look forward to working with the entire Bioriginal team to grow our company and create a more balanced business portfolio across animal and human nutrition."

Bioriginal will then operate as a wholly owned subsidiary of Omega Protein. Its president and CEO, Joe Vidal, said, "Bioriginal has a consistent track record of sourcing ingredients from across the world to formulate unique products for our customers.  We are excited to become part of Omega Protein, a leading integrated producer of essential fatty acids, specialty proteins and nutraceuticals, while maintaining our manufacturing and distribution network. We believe together, Bioriginal and Omega Protein will deepen our relationships with existing customers and broaden our reach to new customers across all of our markets."

The purchase price for the acquisition is about $70.5 million, plus $0.7 million for estimated working capital adjustments, and will consist of $46.5 million in cash, assumption of $21.5 million of  Bioriginal's indebtedness and 0.2 million restricted shares of Omega Protein's common stock issued to Bioriginal's executive shareholders valued at $3.2 million based on the average closing price of Omega Protein's shares for a 30-day period.  Bioriginal's executive shareholders are also eligible to receive additional cash consideration if Bioriginal achieves certain financial targets over the next three years. The company will fund the cash portion of the purchase price with a combination of available cash and borrowings under its revolving credit facility. Information regarding the acquisition will be found in Company's Current Report on Form 8-K filed with the Securities and Exchange Commission.