MANAGEMENT’S DISCUSSION & ANALYSIS (CONT’D) 5. Performance 5.1  The American Pride Acquisition in the December 28, 2013 financial statements are based on a  provisional assessment of fair value as the Company has sought an independent valuation for the purchase price allocation. The results of the valuation have not been finalized as at the date these financial statements were approved for issue by  management, and as a result, the financial information disclosed is based on management’s best estimate and are disclosed on a provisional basis. On October 1, 2013, High Liner Foods acquired the net assets and  operations of American Pride Seafoods from Seattle-based  American Seafoods Group LLC. American Pride is primarily a value-added frozen seafood food  service and scallop processing business based in New Bedford,  MA. The acquisition bolstered High Liner Foods’ market leadership  position in the food service segment of the U.S. value-added frozen  seafood market, and also added a significant U.S. based scallop  processing operation to the Company’s business portfolio. American Pride’s branded and private label products are  primarily distributed in the U.S. to food service customers in the  commercial and independent restaurant, health care and  education markets, as well as to some export and U.S.  retail markets. American Pride’s revenues were approximately $190 million in  2012. The acquisition was modestly accretive to earnings in 2013  and we expect it will modestly accretive in 2014, after considering  the impact of incremental interest costs related to financing the  acquisition, and excluding the impact of any integration costs.  One-time costs associated with the acquisition were expensed in 2013 and the acquisition was financed within existing credit facilities. High Liner Foods plans to operate American Pride without any  substantial changes to its existing operations until post-Lent 2014.  This will allow High Liner Foods to continue its current efforts  focused on fully realizing the synergies related to the closure of our  plant in Danvers, which occurred in the first quarter of 2013. As a  result, realization of the full synergies expected from integrating  this acquisition will be not be realized until after 2014. While the  operating margins of American Pride have traditionally been lower than those of High Liner Foods, the Company expects these  margins will improve to levels closer to High Liner Foods’ existing  operating margins once American Pride is fully integrated and  expected synergies from the transaction are realized. High Liner Foods paid $34.5 million in cash proceeds, subject to  closing working capital adjustments, to acquire American Pride’s  net assets, which principally included inventory, plant and  equipment located in New Bedford, and excluded accounts  receivable of approximately $15.5 million, for a total estimated  enterprise value at that time of approximately $50.0 million. As  part of the transaction, we also assumed certain operating leases  related to the acquired businesses. The acquisition was financed  within existing credit facilities. Subsequent to the acquisition date and after estimated working  capital adjustments, the purchase price was estimated to be  $30.3 million, excluding accounts receivable. The Company and  the vendor have yet to finalize the working capital adjustments for  this transaction; however, the final amount will be ascertainable  later in 2014. Additional information on the fair value of the  identifiable assets and liabilities acquired is provided in  note 4  to  the Consolidated Financial Statements. The net assets recognized  Since this acquisition didn’t occur until early in the fourth quarter  of 2013, only one quarter of 2013’s financial performance includes  the impact of the American Pride Acquisition. The information in the following table is intended to assist the reader in  understanding the impact of the American Pride Acquisition on the Company’s consolidated financial performance in fiscal 2013.  Sales Volume Adjusted  (millions Sales Sales EBITDA  (Amounts in $000s, except sales volume)  of lbs)  (USD)  (Domestic $)  (USD) Actuals 2013, excluding American Pride 269.8 $ 907,601 $ 916,607 $ 83,852 Actuals 2013, American Pride only 12.6 39,700 39,700 1,491 Actuals 2013, including American Pride  282.4 $ 947,301 $ 956,307 $ 85,343 Actuals 2012 275.2 $ 942,631 $ 942,348 $ 91,687 Change, excluding American Pride  (2.0)%  (3.7)%  (2.7)%  (8.5)% Change, American Pride only 4.6% 4.2% 4.2% 1.6% Total change, including American Pride 2.6% 0.5% 1.5% (6.9)% HIGH LINER FOODS INCORPORATED 30