Clearwater

"“Thompson was untroubled by self-doubt and as his wealth grew he increasingly indulged himself in whatever enterprises caught his fancy,”"

"“Explore a single individual deeply enough... and truths about all individuals emerge.” Robert A. Caro, The Years of Lyndon Johnson: Means of Ascent"

"Colin MacDonald"

"“She was very proud of Dad, definitely the driving force behind him as well,” Sarah said. “She definitely put forth [the] idea to Dad that he needs to make money. And was [that drive to make money] there already? Yes.”"

"His first job was mowing lawns in the neighbourhood—$ 1 a lawn; $ 2 for a big one. “I enjoyed it. I’ve always enjoyed working,” he said. “I’ve hated lots of things I’ve had to do. But I’ve never hated the prospect of work.”"

"“What drives you? Like, what motivates you through all this?” “Determination,” his younger brother responded. Determination to not fail."

"Michael Lee-Chin,"

"“I grew up on the water—always have loved the water. And it was very fortuitous that I was able to make a living from the water. Anything to do with the water, I’m interested in.”"

"“He was pretty direct, and he seemed to us to be very honest. He didn’t want to screw anybody. He just wanted to make some money,”"

"And yet, he added, “It’s the guy who asks the stupid questions who sees where the industry is going to go, while the industry itself may not have thought about it.”"

"“From the beginning, Risley’s corporate strategy has stressed these basic principles: be in the right fishery [lobsters and shellfish]; market internationally; become low-cost producers; control quality scrupulously; and, above all, invest heavily in plants, machinery and people.”"

"At the age of eight or nine, Risley realized money was a “driving force in life”—without it, you’re prevented from doing certain things. He felt some people accepted they wouldn’t have much money; he did not. “We were not a family that was starving to death. We would get our socks darned if there was a hole in them, rather than getting a new pair. But we were very lucky... a very average middle-class family, by no means poor,” he said. “Having said that, the message all around me was that money was a big deal. I didn’t like that; I didn’t like living under the yoke of thinking that we didn’t have enough money.”"

"[Entrepreneurs] are guys who create,” he added. “And Risley is a creator.”"

"Bernie Cornfeld,"

"“The real strength for Clearwater now is its diversification.” Each deal was made to acquire key people, new products, innovative ideas, or access to specific species. For example, shrimp in Quebec and Georgia; scallops in Port Mouton; herring in Shelburne; salt fish in Lockeport. “What we were really buying was quota and licences. Sometimes we got fish plants,” Risley explained. “There are no new licences being given out, so the only way you can ever acquire a licence is to buy it from someone who’s got it.”"

"“John was always the person focused on new opportunities, growth, the business deals, the merger-and-acquisition deals,” Spavold added. Canadian senator Stephen Greene, Risley’s former assistant, summarized the pairing like this: “Colin would think to the end of the day. [John would think] to the end of the millennium.”"

"We were both workaholics, and willing to do whatever we had to do to make a go of it. And bound and determined not to fail at it.”"

"Money has] absolutely nothing to do with happiness! Nothing. Zero. It’s hugely difficult to get people to understand that you can be happy with no money. When [Judi] and I were first married—I look back on that as one of the happier times in my life. We had nothing! Absolutely nothing! We used to worry about where we were going to get $ 20 on Friday to get a week’s worth of groceries. Now, I’m not saying I would be happy if I went back to worrying about paying the weekly grocery bill, but the problem is that people say, ‘Well look at the money he’s got, look at how happy he must be.’ They don’t have any idea about the responsibility that goes along with employing people and taking risks and borrowing money and dealing with challenges. None of these are easy things to do. A lot of people go to bed at night not knowing what to worry about. I never have that problem! I’ve always got shit to worry about.”"

"“John’s always had somebody there. He hasn’t been the operator. He’s been the innovator, he’s been the strategist, he’s been the supporter.”"

"I can tell you, psychologically it’s really hard on him to live up to those roles. You’ve got to always be on top of your game. You can’t allow yourself to slip. You can’t let people peek into your reality. You can’t be yourself.”"

"“John gets it going. Colin gets it growing.”"

"“I’m not a guy who can just sit around and swap [small talk] with people. I’m not there to dance. I’m there to find out what’s going on, to get right to the meat of the matter. I want to get it done.”"

"In reality, though, figuring out a way to actually do it came second to telling customers it could be done. “We went to customers and told them we could deliver six boxes with a day’s notice. And we developed a system to do that,” MacDonald added. “That’s the God’s truth. We’d make commitments and then we found ways to get it there.” Clearwater promised a high-quality product at a consistent price year-round, a bold pledge for a one-shop outfit in the Halifax suburbs. “When we say we can ship you three thousand pounds per week of one and one-quarter pound lobsters of good, hard shell for the next nine months at such and such a price, we mean it,” Risley told Canadian Business magazine in 1986. “Because we were a small company, we had to be willing to do all kinds of things the big companies weren’t willing to do—work seven days a week, send our shipments out at 2: 00 a.m. on a Sunday morning, offer better prices, whatever it took.” Though as Risley added a year later: “If we had known the consequences of our commitment, it’s doubtful that we would have continued in the business.”"

"Risley and MacDonald applied that lesson in 1994 when acquiring Yarmouth-based Laurence Sweeney Fisheries for more than $ 30 million. It was a significant, front-page-news purchase for Clearwater, giving it fish plants in Yarmouth and East Pubnico, five offshore trawlers, an office complex, almost half of Yarmouth’s developed waterfront, and 13.5 percent of Canada’s offshore scallop quota, meaning Clearwater now controlled more than a third of the scallop quota. Risley and MacDonald began consolidating immediately; Sweeney Fisheries would not operate autonomously in its own orbit, nor were all its assets of interest to Clearwater. So on the same day Risley and MacDonald cemented the deal, they began chopping Sweeney up to aid—not hinder—Clearwater. “We just closed down the plant in Yarmouth—sold it off to someone else—and moved all the boats and the processing activity to Lockeport. Bang, bang, bang,” Risley recalled. “We didn’t need it. What we wanted was the quota that they had in the scallop business. That was our principal interest.... We were just very matter of fact [saying], ‘Look this is our plan, we’re implementing it, and we’re getting on with it. And we’re not going to play games here.’” In other words, they would not repeat Jerry Nickerson’s mistake. Concluded Risley: “Jerry won’t be happy that he paid the price of that lesson.”"

"“Yes,” MacDonald replied. “I think sometimes I’m the voice of reason; he’s the voice of irrationality. But at times he would say that he’s the voice of ambition, and I’m the voice of hesitation—I’m the negativity; he’s the positivity."

"“It’s just the nature of the game. If you look back in hindsight, would you have done all the deals you did? No!” he said, laughing. “You would pick just the winners and forget about the ones that didn’t perform quite as well. Nobody gets to manage their business with the benefit of a retroactive crystal ball.”"

"Risley had previously made around fifty pitches for the $ 20 million Clearwater needed to complete the series of deals he had lined up. Those pitches were mostly made to what Risley referred to somewhat derisively as “financial types.” The typical response had been, “Geez, that’s a lot of money. I don’t know.” Thompson was the opposite. “Twenty million? Is that all you need?” Risley, laughing, recalled him saying. Thompson turned to his CFO, John Jackson, and said, “Get your butt over to Canada and see what this young man is talking about.” So Jackson flew to Nova Scotia to meet with Risley and MacDonald and to inspect some of the deals Risley was eyeing. “And they sort of became my partner. We spent several years together building a big seafood business,” Risley concluded. “Twenty million wasn’t a lot of money for them but it was a huge amount of money for us.” Risley found no shortage of deals to pursue, eventually launching an acquisition spree that both amazed and baffled many in the seafood industry—how was a ten-year-old company able to afford so many purchases?"

"Risley claimed he remained dogged by financial worries. “One day you’re worried about groceries and the next day you’re worried about payroll and the next day you’re worried about where you’re going to get the money necessary to buy a business,” he explained. “So you’re always under financial stress. It’s just the scale and type of stress changes. I still feel that today. I still worry about money because I’m trying to do deals all the time.” Though in his seventies and capable of living comfortably with minimal effort, he was still working “seven days a week, fourteen hours a day,” and continuing to invest in companies spanning banking, renewable energy, and alternative protein—“ all over hell’s half acre,” as he put it with a laugh."

"“At a certain point you appear to be too dominant. Whether you actually are or not is another story. Clearwater have sometimes been portrayed as the big bad corporate giant. I’ve never seen them that way.”"

"He then told a story about a family member who’d approached him for support a couple of years before. She was a single mother with two kids and wanted to upgrade her training to become a registered nurse, but she couldn’t afford the tuition or take time off work to study while supporting two children. “She’s got a great work ethic.... So it was nice to be able to provide financial support to help somebody help themselves,” he said. “There’s two kinds of cheques you write. One is a cheque for consumption, and the other is a cheque for investment. When you can invest in helping somebody improve themselves, you get a lot of pleasure. You don’t get any pleasure writing a cheque for somebody’s new car.”"

"“His focus changed from simply wanting to amass more money to creating successful businesses, because that really is more of a challenge. If you create a successful business, then the money aspect follows.” Robert also referred to his brother’s “insatiable thirst” for knowledge: “I can’t think of a topic you could bring up that he wouldn’t have his opinions on. And it might be all BS, but he’ll make you believe that his opinion is right.”"

"“He’s been close [to the edge] a lot of the time,” said Hugh Smith. “It’s just a question of who gets paid. Then he sells Ocean Nutrition—gets a windfall. Sells Columbus—gets a windfall. Sells Clearwater. All these core assets get sold and the money just goes....” Smith then made a sound to convey money disappearing in all directions. “He leaves nothing on the table. Nothing. And that was my biggest advice or caution to him: when you have a windfall, it’s not shameful to tuck some away,” Smith continued before letting out a jolly laugh. “In defence of him, a lot of it is feeding the liabilities.... If you make $ 100 million selling Clearwater and you’re building a $ 200-million boat, well, it’s hard to get the math.”"

"Clearwater at one time needed a dozen boats to harvest its scallop quota. The company transitioned to seven boats, then four, then two: the Atlantic Preserver and the Atlantic Protector—large factory ships that allowed Clearwater crews to harvest, process, and freeze up to two hundred thousand pounds of scallops in a two-week trip. Both vessels contained automatic shucking technology, the in-house machinery that took years to develop and was first used in 2010. Traditionally, a dexterous Clearwater crew member could hand-shuck fifteen scallops per minute; the shucking machines could process forty to fifty in that time, tripling the productivity of the vessels, MacDonald said. “We caught the same number of scallops, we just caught ’em in a third of the trips.” After being shucked, the scallops were counted, washed, and frozen. Within about twenty minutes they’d gone from the bottom of the ocean to a freezer set at-18 ° C."

"Clearwater saw the offshore lobster licences as likely “expropriation” targets. “[ That] was the next so-called monopoly we worried about the government coming after us for,” Risley explained. So in September 2020, the company pre-emptively sold two of the licences to the Membertou First Nation in Cape Breton for $ 25 million, neutralizing concerns about their grip on offshore lobster as well as the lack of Indigenous participation in the offshore fishery. (Clearwater would help Membertou with the harvesting and processing of its lobster.) Membertou Chief Terry Paul called it a “historic strategic investment.” “Membertou had long expressed an interest in working with us in the lobster fishery,” Risley recalled. “So our feeling was, ‘Look, this is a feature of life today that isn’t going away, i.e. partnering with First Nations communities. So let’s do this on a strict business basis.’ We got market value for the licences; Membertou was happy, and we were happy, and it’s no longer a monopoly fishery.”"

"“It was battered, and it fit in with what I usually like to do: invest in unloved and undesired companies,” Armoyan recalled."

"It benefited from a growing global seafood demand, especially in Asia, during a time when supply remained flat, a fact that helped boost prices. Smith also profited from innovations implemented across Clearwater’s operations, from its vessels to plant floors, both before and during his tenure. For instance, 3D ocean-mapping technology allowed Clearwater crews to be more efficient in harvesting clams and scallops from the sea bottom. “That was a huge breakthrough,” Smith said in 2016. “This technology had never been applied to the fishing industry.” Former Clearwater executive Graham Roome argued Risley deserved credit for backing 3D-imaging technology, calling it “one of the top ten things that took place in the fishery.”"

"Regardless of why it was launched, the IPO was a resounding triumph. It generated more than $ 271 million, of which Risley and MacDonald used roughly $ 130 million to pay off debt. That left them more than $ 100 million in CFFI, in addition to their remaining 55 percent stake in Clearwater."

"John Hancock would later help Risley and MacDonald raise nearly $ 200 million in their failed effort to privatize Clearwater. When I pointed that out, and noted it seemed unlikely John Hancock would have contributed if it had pulled its previous loan, Risley agreed. “Yeah, exactly,” he said. “But that just comes from Colin’s very peripheral understanding of really what was going on, and the fact that I wasn’t taking the time to tell him what was going on.”"

"According to Risley and Spavold, MacDonald’s relatively modest lifestyle was simply a personal choice. “Whenever Colin needed money, we gave it to him. He had a different objective in life than John did. That’s all,” Spavold said. “We funded Colin’s account the same way we funded John’s. We never controlled the amount going to him. Whatever he spent, we covered. That was the deal. If he had wanted to buy a boat, he could have bought a boat. We wouldn’t have stopped him.”"

"“The attraction was [to] get a bunch of capital and deploy it in diversifying our portfolio,” Risley recalled. That was the explanation Risley gave me for taking Clearwater public. When I asked MacDonald to explain the rationale, he paused. “Now, do you want the truth?” I laughed. “Please.” “We had lenders in the US who... got upset at John spending money personally out of the company. They called our loans. And we were all of a sudden in a dangerous place,” he said. “We lost our [main] lender.”"

"“So am I fair in saying that at these different stages—with Hillsdown, Clearwater going public, and the sale of Ocean Nutrition—that John was pre-spending the money?” I asked. “Oh, fuck yeah,” MacDonald shot back. “He was building, buying, and pissing money away. I didn’t have a problem with him spending money. I simply assumed my money was still in the company.”"

"MacDonald also alleged Risley spent millions of dollars from their shared holdings when Clearwater was backed by Hillsdown, and also pre-spent their proceeds from the Ocean Nutrition sale. “The money is the business money. It’s not your personal money. And John has never been able to divide the two.” According to MacDonald, this was the real reason they’d launched the initial public offering (IPO) of Clearwater units. “The company was borrowing money to operate, and it wasn’t going just to operations. It was being spent... on his personal [expenses]. They’ll let some of that happen, but not to the extent that it was happening. I think that scared him.”"

"At the end of each meeting, Risley would ask questions such as: “If you had unlimited funds, what would you do? If you had another $ 50 million, what would you do?” “That was the most productive part of the meeting because you got to the aspirational side,” Paddick said. “John was incredible at getting you to think bigger and bolder than you thought you safely could.”"

"I asked Paddick about Malone’s entrance to the company at the end of our first interview. “That was 2013,” he said. “Malone was only in for two years. But quite a two years.” Having already kept Paddick on our video call for an hour and a half, I suggested we could cover Malone’s involvement in a second interview. “The Malone story is pretty simple,” he replied, suggesting it didn’t have to wait. “He put in $ 185 million [USD] in January 2013 and got $ 1.1 billion in November 2015. Not a bad [thirty]-something months.”"

"Persona would take the acquisition and consolidation playbook it had developed in Canada and apply it to the Caribbean—in places like Jamaica, Trinidad, Barbados, and the Bahamas. “Nobody in the industry saw this as a particularly appetizing market,” Risley recalled. “Because there were too many operators, nobody had really invested in technology. Broadband speeds were terrible. Telephone rates were sky high.... You would have been shocked by the cost of making a telephone call out of anywhere in the Caribbean...."

"Risley did not live in the Caribbean during his time as a Columbus founder and investor, nor was he involved in the day-to-day running of the company. Like his involvement with Clearwater and Ocean Nutrition at the time, he was on the board. In the case of Columbus, he was focused on the larger strategy: dealmaking, meeting with banks and raising the capital necessary for expansion."

"Details were scarce, but FPI would finance the acquisition by taking on $ 210 million in existing Clearwater debt and issuing millions of non-voting shares to Risley and Colin MacDonald, meaning they were giving up 100 percent of Clearwater to get non-voting shares in FPI. Risley would be CEO of the giant company and would reportedly hold (through CFFI) 60 percent of the combined common shares but still only about 15 percent of the preferred voting shares. “I will therefore have no more control over the company when the transaction is closed than I have today,” Risley declared. (Except he would also be running it.)"

"“Our aspirations for FPI were completely noble. All this idea of raping and pillaging was absolute total bullshit.... We were interested in trying to make the company more successful and building an Atlantic Canadian seafood powerhouse that could be an important global protein company. Period. That was our ambition. But Atlantic Canada thinks small. And so everybody sort of tears at you and says either, ‘Oh that’s impossible,’ or, ‘That’s not really your motive. Your motive is to enrich yourself. And by definition that means you have to impoverish someone else.’ The best way to enrich yourself is a rising tide that lifts all boats. It’s very difficult to enrich yourself and naturally impoverish anyone else. You can obviously do that criminally. But if you’re going to do it legally, it’s pretty hard to do!” He laughed before continuing. “Usually people that do very well, if you look at the richest people in the world, they’ve made a lot of people around them a lot of money. They’ve built very successful businesses and employed a lot of people and paid good salaries and really been a huge benefit to their communities and their societies generally. We didn’t have any different ambition than that.”"

"Five months later, on September 6, 2001, FPI announced a blockbuster move: it would purchase Clearwater for $ 510 million. In other words, John Risley-dominated FPI was buying Clearwater, the company co-owned by John Risley, to make what The Canadian Press said would be a “mega” fish business. And Risley would become its new chief executive."

"“John is always going to focus on growth, on new ideas, on growing the organization... being very aggressive, growth-oriented—‘ Let’s expand, let’s spend money.’ And my job was more structural—making sure we had the spending on budget.”"

"“John’s off doing deals and dreaming ideas and Stan’s like the zookeeper behind the elephant with the shovel.”"

"A typical CFFI investment would be somewhere between $ 20 million and $ 100 million, much of it with borrowed money, thus an 8-to 12 percent return wouldn’t be sufficient to justify the borrowing costs. “We have to have a return of around 22 percent or higher to make sure we are covering all of the risk,” Spavold concluded."

"“All our businesses are differentiated on technology. ONC was differentiated on technology. We knew more about omega-3s than anyone else in the industry. We used that knowledge to...[ create] concentrated products. Nobody else had thought about how to concentrate the omega-3s. That was a huge technology advantage and we traded on that.”"

"“You don’t grow and you don’t create wealth without taking risk.... It’s easy to dismiss what it takes to build. It’s not just financial risk. You make sacrifices that other people don’t make. And you put yourself out in the public eye and take criticism that is totally unfair.”"

"Clearwater’s competitive advantage: the ability to deliver quality lobsters year-round at predictable prices, thanks to the development of dryland pound technology. That realization has shaped his investing in the four decades since. “We would not invest in something like a distribution company. We would not invest in a restaurant business. We would not invest in any industry or business that did not have the prospect of having a significant competitive advantage—a real point of difference that you can defend. And for the most part that’s a technology, IP [intellectual property]-based business,”"

"rugged individualism"

"One issue hampering the company was, paradoxically, Risley’s best attribute: his ability to see—and desire to pursue—new opportunities. At Ocean Nutrition he was eager to chase new marine oil applications, and like Colin MacDonald in the early days of Clearwater, Jamieson felt Ocean Nutrition was becoming too scattered and needed to prioritize."

"“I’ve skated close to the edge several times. You’ve got to have that kind of tolerance.”"

"“That never occurred to me—that I would shut it down and walk away. I always thought... there’s this opportunity here and we’re committed to it, and you sort of swallow hard and keep upping the ante,” he said. “When you start a business from nothing, you lose money. That’s almost a certainty. And you’re never quite sure how much money you’re going to lose before you start making money.”"

"“We love the opportunity to use all these things as business tools and to share them. It helps you build your network and attract people to the organization,” he explained. “We want to give people memorable experiences.... And we’re sort of selfishly trying to get a business benefit from that.”"

"it’s the same situation with incoming investment pitches. “We don’t have to go looking for opportunities. Opportunities come to us,” he said. “You don’t go through a day when someone isn’t pitching you an idea.”)"

"The second piece of Risley’s information-gathering strategy counters that fact: he advocates “getting your ass out [there]” and meeting new people. “I’ve always been a door opener. I preach to our people: don’t close doors, open them. That’s how you learn.”"

"Risley credits his predictive powers to two activities. The first is his voracious reading of non-fiction—much of it about history—and the financial press."

"Ocean Nutrition’s initial research focus was broad—too broad. It pursued the anti-cancer effects of shark cartilage; developed a product derived from seaweed to boost immune system function; and worked on applications involving glucosamine, a compound found in cartilage that is harvested from shellfish and used to treat pain associated with osteoarthritis. On the surface, that was an obvious research target for Ocean Nutrition, given Risley’s shellfish background. Overall, the goal was to use Clearwater’s seafood waste materials to develop a portfolio of nutritional products and ingredients, but the scattered focus was expensive. “We were spending way too much money and losing too much money,” Risley recalled. “So we ultimately decided to focus on omega-3s and dispense with all the other stuff.”"

"“I have long been interested in this concept of a second chance,” Risley wrote in a letter to the school, “believing it far less expensive both in financial and human terms to help children when they need it rather than to punish them when it’s too late.”"

"“He would always have been the first person to give up whatever he had to help somebody else.”"

"Risley was at this point—the mid-to late-1990s—still predominantly focused on the larger picture at Clearwater. A new company focused on omega-3 R and D would require a dedicated top executive, someone to help actualize Risley’s big-picture vision—someone to focus on the day-to-day, granular details that were of little interest to him. He found that operating partner when CFFI bought Laer Products, a company that had supplied omega-3 fish oils to the veterinary industry before going bankrupt. Risley tapped Laer’s general manager, Robert Orr, a former grocery executive, to build a team and create a new company, which was formally incorporated as Ocean Nutrition in March 1997."

"“Travel is his happy place,” Amy said of her husband. “He likes adventure, he doesn’t like to lie on a lounge chair. He likes to do and see and experience.”"

"Risley was more robotic, more internally focused—on work, ideas, deals, and projects."

"If a community helps you make money, as this community has helped me make money, then it’s incumbent upon me to give back to that community. It’s just a virtuous circle.”"

"“Business drives my life and if I could do it all over again would I spend more time with family and grandchildren? Absolutely,” Risley said. “But I don’t stand on my regrets. I can’t change the past. I can only change the future.”"

"“It was funny because our attitude was this is the next best thing to a gold mine,” he said. “We couldn’t care less whether it was a good financial investment. We never intended to sell it again. We wanted to enjoy it. We wanted our children to enjoy it and we wanted our grandchildren and their children to enjoy it. So, we just had a completely different perspective.”"

"Essentially, consolidating the small empire Risley had assembled proved difficult. “The more companies we bought, the more these challenges came to the fore and the more difficult they were to resolve.” There was also the issue of geography and trying to oversee businesses on two continents, involving fisheries in two different oceans."

"In all his major businesses, Risley has relied on a strong partner to oversee the day-to-day operations, someone to take care of the details while he’s focused on strategy, business development, and new markets—the big picture."

"I’m just saying that money brings responsibilities. And you have to take those responsibilities seriously or you’re not going to fulfill your obligations to those who count on you. And it’s not about making more money or less money, but if you’re going to be the chairman of a company and its largest shareholder, then your obligation is to all the employees of that company to help it grow.... You bear that responsibility.”"

"“We felt like we could do anything,” Michael explained. “No challenge was insurmountable. You could go to him with anything, and it would be all about finding a solution... If you came to him with two different ideas and one was really just a small idea and the other one was a gigantic, improbable idea, he will absolutely be way more excited about the improbable idea.”"

"“Yeah,” Roome said in agreement from Newfoundland. “And the fact that he recognized the value of enterprise allocation and quota better than anybody.” For his part, Risley didn’t dispute that some of the Hillsdown-funded acquisitions failed to deliver, arguing that’s expected when you’re doing a “shitload of"