Omega Protein Corporation, a quoted company based in West Houston, has agreed to be bought by Cooke Inc, a Canadian company, for $22 per share or $500 million. The purchase price represents a premium of 33% on the closing share price on 5 October. The shares were trading at $26 as recently as February of this year.
The company’s biggest business is the production of fish oil for use as a protein ingredient in animal feed. It also has a human nutrient segment that produces specialty oils and proteins. For 2016, the company had revenues of $391 million, EBITDA of $96 million and net income of $32 million. The company went public in 1998 though the original business was founded in 1913.
The assets being sold include 7 manufacturing plants, 38 fishing vessels, 27 spotter aircraft (used to spot schools of Menhaden, a herring-like fish, that is the principal raw ingredient) and a shipyard in Mississippi.
Immediately prior to the merger announcement, the company amended the employment contracts for its senior executives so that they would receive the same benefits if they are constructively terminated as they would if they were involuntarily terminated. In other words, if the buyer requires the corporate officers to relocate more than 50 miles away or if the buyer materially changes the base salary or cash bonuses, the executives would be entitled to one year of salary as severance.
CEO Bret Scholtes has a salary of $550,000 and received a cash bonus of $700,000 in 2016. CFO Andrew Johannesen has a salary of $340,000 and received a cash bonus of $354,000 in 2016.