WINNIPEG, Nov. 29 /CNW/ - Exchange Industrial Income Fund ("EIIF") (TSX
Venture: EIF.UN) announced today that it has completed a Letter of Intent to
acquire Stainless Fabrication Inc. ("SFI") of Springfield, Missouri. SFI
designs and manufactures stainless steel tanks, vessels and processing
equipment. The company services the healthcare, pharmaceutical, food, ethanol,
dairy, beverage, chemical and transportation industries. The company provides
both custom fabrication and field fabrication / erection services to customers
such as Unilever, Xerox, Bayer, Novartis, Nestle, Phillip Morris, Genentech,
ADM, Cargill, Kraft Foods, Coca Cola and Bausch & Lomb. The company was
founded in 1985 by Claude Mizell, Bill Nicholson and Bob Mosley. Following the
completion of the transaction, Mr. Mizell will stay on as President of the
SFI is the first US acquisition for EIIF. Mike Pyle, the President and
CEO of EIIF stated, "We are very excited about the acquisition of SFI. It is
an excellent target for our first acquisition in the United States, with a
proven market niche, strong revenue growth and a long list of blue chip
clients. Furthermore, it is an excellent fit with our existing metal
manufacturing businesses and we expect significant opportunities for the
companies to work together to fully leverage their individual competitive
advantages and the recent appreciation of the Canadian Dollar has made US
acquisitions much more cost effective."
Total Revenues for SFI for the year ended December 31, 2006 were $27
million (US) and revenues for the current year are expected to be 30% or more
ahead of 2006. The preliminary purchase price of SFI is $22 million (US). It
is subject to adjustment based on performance in the balance of 2007 and 2008.
Claude Mizell, President of SFI stated, "Bill, Bob and I started this
company over 20 years ago, and the time has come for us to look at divesting
ourselves of the business. We spoke to a number of potential purchasers, but
were very comfortable with the team at EIIF. While Bill and Bob plan to retire
shortly after the transaction is complete, I intend to stay on for several
years. All of us however were concerned about the plan for our business and
how our employees would be treated following the transaction. EIIF has
demonstrated that they do not purchase companies with a goal of making a few
changes and flipping the company for a profit. They are in for the long haul.
Selling to EIIF was a logical step for our company to enable it to continue to
Adam Terwin, the CFO at EIIF stated, "We believe that the SFI transaction
is an attractive one for our unit holders. The deal is expected to be
accretive to our unitholders immediately, and should become more so as the
synergies between SFI and our other manufacturing entities are realized."
The transaction is subject to completion of due diligence and financing.
It is anticipated that the transaction will close within the next 60 days.
Additional information relating to the Fund, including all public
filings, is available on SEDAR (www.sedar.com).
The TSX Venture Exchange has neither approved nor disapproved the
contents of this press release.
Visit us at: www.eiif.ca.
For further information:
For further information: Contact Mike Pyle, President and CEO, Exchange
Industrial Income Fund, 1067 Sherwin Road, Winnipeg, MB, R3H 0T8, Phone: (204)
982-1850, Fax: (204) 982-1855, E-mail: email@example.com