Toronto Stock Exchange: AW.UN
VANCOUVER, Feb. 9 /CNW/ - A&W Revenue Royalties Income Fund (the "Fund")
and A&W Food Services of Canada Inc. ("Food Services") announce that
the Fund and Food Services have entered into an agreement with CIBC and
National Bank Financial Inc. and a syndicate of underwriters
(collectively, the "Underwriters") to complete a secondary bought deal
offering of units of the Fund ("Units"). Under the agreement, the
Underwriters will purchase 2,997,000 Units at a purchase price of
$23.35 per Unit for gross proceeds of $69,979,950. The Units are being
sold by Food Services. The Fund will not receive any proceeds from the
offering. The offering will be made pursuant to a short form prospectus
to be filed with securities regulators in each of the provinces of
Canada. The offering is expected to close on or about March 2, 2011.
Closing is subject to a number of customary conditions, including
receipt of all necessary regulatory approvals.
Food Services currently owns securities indirectly exchangeable for
4,247,358 Units (the "Exchangeable Securities"), representing a 34%
indirect interest in the Fund. Prior to closing of the offering, Food
Services will exchange only the number of Exchangeable Securities
needed for the number of Units to be sold pursuant to the offering.
Following the closing of the offering, Food Services will own
Exchangeable Securities indirectly exchangeable for 1,250,358 Units, or
approximately a 10% indirect interest in the Fund.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy, which may be made only by means of the
prospectus, nor shall there be any sale of the Units in any state,
province or other jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the
securities laws of any state, province or jurisdiction. The Units have
not been, and will not be registered under the U.S. Securities Act of
1933, as amended, and may not be offered or sold in the United States
absent registration or compliance with an applicable exemption from the
registration requirement under U.S. securities laws.
About the Fund
The Fund is a limited purpose trust established to invest in A&W Trade
Marks Inc. ("TMI"), which through its interest in the A&W Trade Marks
Limited Partnership (the "Partnership"), owns the A&W trade-marks used
in the A&W quick service restaurant business in Canada. The A&W
trade-marks comprise some of the best-known brand names in the Canadian
foodservice industry. In return for licensing Food Services to use its
trade-marks, TMI (through the Partnership) receives royalties equal to
3% of the sales of A&W restaurants in the Royalty Pool. Food Services
is the second largest quickservice hamburger restaurant chain in
Canada. Operating coast-to-coast, A&W restaurants feature famous
trade-marked menu items such as The Burger Family, Chubby Chicken and
A&W Root Beer.
The Royalty Pool is adjusted annually to reflect sales from new A&W
restaurants, net of the sales of any A&W restaurants that have
permanently closed. Additional limited partnership units are issued to
Food Services to reflect the annual adjustment. Food Services'
additional limited partnership units are exchangeable for additional
non-voting common shares of TMI which shares are exchangeable for Units
of the Fund.
Food Services currently owns 34% of the common shares of TMI, and
therefore currently owns the equivalent of 34% of the Units of the Fund
on a fully-diluted basis.
TMI's dividends to the Fund and to Food Services, and the Fund's
distributions to unitholders are based on top-line revenues of the A&W
restaurants in the Royalty Pool, less interest, general and
administrative expenses and current income taxes of TMI, and are
thereby isolated from many of the factors that impact an operating
Certain statements in this report may be forward-looking in nature.
Actual results may differ materially from those expressed or implied in
these forward-looking statements. The forward-looking statements are
based on assumptions that management considered reasonable at the time
they were prepared. These forward-looking statements are subject to a
number of risk factors, including general economic and business
conditions, unemployment, harmonization of sales taxes, financial and
political instability, changes in income tax laws or their application
to the Fund and other factors disclosed previously and from time to
time in the Fund's public filings. Forward-looking information is
provided as of the date hereof and, except as required by law, we
assume no obligation to update or revise forward-looking information to
reflect new events or circumstances.
Additional information relating to the Fund is on SEDAR at www.sedar.com
and on the Fund's website at www.awincomefund.ca.
For further information:
Don Leslie, Chief Financial Officer: (604) 988-2141 or email@example.com