K-Bro Linen Income Fund Announces $17.5 Million Bought Deal Equity Financing



    /NOT FOR DISTRIBUTION THROUGH U.S. NEWS WIRE SERVICES OR DISSEMINATION IN
    THE U.S/

    EDMONTON, Feb. 6 /CNW/ - K-Bro Linen Income Fund (TSX: KBL.UN) ("K-Bro"
or the "Fund") today announced it has entered into an agreement to sell
1,362,000 units of the Fund ("Units") at a price of $12.85 per Unit to raise
gross proceeds of approximately $17.5 million on a bought deal basis. The
underwriting syndicate is led by TD Securities Inc. and includes National Bank
Financial Inc., Blackmont Capital Inc., Dundee Securities Corp., Cormark
Securities Inc. and Canaccord Capital Corporation (collectively, the
"Underwriters"). K-Bro has also granted the Underwriters an Over-Allotment
Option, exercisable in whole or in part for a period of 30 days following
closing, to purchase up to an additional 204,300 Units at the same offering
price. If the Over-Allotment Option is fully exercised, the total gross
proceeds to K-Bro will be approximately $20.1 million. The offering will be
made by way of a short form prospectus in all of the provinces of Canada and
is expected to close on or about February 27, 2008, subject to regulatory
approvals.
    The net proceeds of the offering will be used to fund the previously
announced acquisition of the assets of Buanderie H.M.R. Inc. ("HMR"), retrofit
and equip the new Calgary facility, repay outstanding indebtedness, pursue
potential acquisition opportunities and for general corporate purposes. The
acquisition of HMR gives K-Bro a significant presence in the Quebec City
market and presents opportunities for expanding K-Bro's healthcare business in
a new marketplace. Management believes the acquisition of HMR will be
immediately accretive to the Fund. The new Calgary facility, which will
service the Calgary Health Region under a new and expanded ten-year agreement
as well as K-Bro's Calgary hospitality customers, is expected to commence
operations in March 2008. This state of the art facility will process
increased volumes under the new Calgary Health Region contract and is expected
to meet the growth plans of the Calgary Health Region and allow K-Bro to seize
other available opportunities in a growing Calgary region. Management expects
to realize labour and operational efficiencies, once the transition to the new
plant is complete, due to the highly automated nature of the new facility.
Total estimated costs for the facility are expected to be approximately $15
million, the majority of which has already been incurred.
    This news release shall not constitute an offer to sell, or the
solicitation of an offer to buy, any securities in any jurisdiction. The Units
being offered have not been and will not be registered under the U.S.
Securities Act of 1933 and state securities laws. Accordingly, the Units may
not be offered or sold in the United States except pursuant to applicable
exemptions from registration.

    ABOUT K-BRO

    K-Bro is the largest owner and operator of laundry and linen processing
facilities in Canada. The company provides a comprehensive range of general
linen and operating room linen processing, management and distribution
services to large healthcare institutions, hotels and other commercial
accounts. K-Bro currently owns and operates laundry and linen processing
facilities in six Canadian cities: Toronto, Edmonton, Calgary, Vancouver,
Victoria and Quebec City.
    Further information can be found in the disclosure documents filed by
K-Bro Linen Income Fund with the securities regulatory authorities, available
at www.sedar.com.

    Caution concerning forward-looking statements

    This news release contains forward-looking information that represents
internal expectations, estimates or beliefs. Certain statements contained
within this news release constitute forward-looking statements. The use of any
of the words "anticipate", "continue", "estimate", "expect", "may", "will",
"project", "intend", "should", "believe" or the negative forms thereof and
similar expressions and variations thereof, are intended to identify
forward-looking statements.
    The expectations, estimates and beliefs contained in such forward-looking
statements necessarily involve known and unknown risks and uncertainties which
may cause the Fund's actual performance and financial results in future
periods to differ materially from any expectations, estimates and beliefs of
future performance or results expressed or implied by such forward-looking
statements. These risks and uncertainties include, among other things, (i)
risks associated with the acquisition of HMR, including the possibility that
K-Bro pays more than the acquired company or assets are worth; the additional
expense associated with completing an acquisition and amortizing any acquired
intangible assets; the difficulty of assimilating the operations and personnel
of the acquired business; the possibility of undisclosed material liabilities;
the challenge of implementing uniform standards, controls procedures and
policies throughout the acquired business; the inability to integrate, train,
retain and motivate key personnel of the acquired business; the potential
disruption of K-Bro's ongoing business and the distraction of management from
its day-to-day operations; and the inability to incorporate acquired
businesses successfully into K-Bro's operations. In addition, K-Bro may not be
able to maintain the levels of operating efficiency that HMR had achieved (or
might have achieved) as a separate business; (ii) K-Bro's competitive
environment, (iii) utility costs, (iv) K-Bro's dependence on long-term
contracts, (v) increased capital expenditure requirements; (vi) reliance on
key personnel; (vii) the availability of future financing, and such other
risks and uncertainties as described in the "Risk Factors" section of the
Fund's Annual Information Form, the "Critical Risks and Uncertainties" and
other sections of our Management's Discussion and Analysis and Consolidated
Financial Statements, and in our other periodic filings with Canadian
securities regulatory authorities. All forward-looking statements presented
herein should be considered in conjunction with such filings. Accordingly,
unitholders of the Fund and potential investors are cautioned that events or
circumstances could cause actual results to differ materially from those
discussed. Forward-looking statements in this news release speak only as of
the date made. Except as required by law, the Fund does not undertake any
obligation to publicly revise these forward-looking statements to reflect
subsequent events or circumstances.

    %SEDAR: 00021539E




For further information:

For further information: Linda McCurdy, President & CEO, (780) 453-5218
x.27, linda.mccurdy@k-brolinen.com or Doug Thomson, C.A., Vice President &
CFO, (780) 453-5218 x.26, doug.thomson@k-brolinen.com


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