/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES/
OTTAWA, Oct. 20 /CNW Telbec/ - OFI Income Fund (the "Fund")
(TSX: OFB.UN), a producer of fibreglass insulation products, today announced
that the Fund and Fibreglass Holdings Inc. have entered into a definitive
agreement (the "Agreement") with CertainTeed Insulation Canada, Inc.
("CertainTeed"), pursuant to which CertainTeed will acquire all of the
operating assets of the Fund, by becoming an owner of all the outstanding
shares of OFI GP Inc., the general partner of OFI LP, and all of the
outstanding limited partnership units of OFI LP.
Under the Agreement, CertainTeed will acquire the assets of the Fund for
approximately $41 million (the "Purchase Price"), plus the assumption of the
Fund's adjusted debt, which will be calculated in accordance with a formula
set out in the Agreement and adjusted at closing. Unitholders of the Fund will
be entitled to receive approximately 96% of the Purchase Price and Fibreglass
Holdings Inc. will be entitled to receive the balance.
The final redemption price is subject to a number of adjustments,
including the amount of net debt outstanding at closing, and certain other
adjustments. To the extent these adjustments are different from the Fund's
estimates, the actual amount paid to the unitholders could be different.
Based on the Fund's current debt and working capital balances, and
estimates of other adjustments at closing, the Fund's unitholders would
receive approximately $3.05 per Fund unit through the redemption of all
outstanding Fund units and the cash proceeds of the Purchase Price to
Fibreglass Holdings Inc. would be approximately $0.16 per Class B subordinated
exchangeable limited partnership unit. Immediately prior to closing there will
be approximately 12,962,618 Fund units and 10,239,540 Class B subordinated
exchangeable limited partnership units outstanding. The redemption of the
outstanding Fund units will occur shortly after the closing of the
The estimated redemption price per unit represents a premium of
approximately 320% over the 30-day volume weighted price of the Fund's units
on the Toronto Stock Exchange for the period ending on Monday, October 20th,
2008, the last full trading day prior to this announcement.
The transaction will be subject to unitholders approval, regulatory
approval and other customary closing conditions, and is expected to close very
early in 2009. The Fund will set a record date for a special meeting of
unitholders, which is expected to be held in December 2008, to approve the
terms of the transaction and the wind up of the Fund.
Holders of approximately 56% of outstanding Fund units and special voting
units, including a Canadian mutual fund manager, members of the Board of
Trustees and Fibreglass Holdings Inc., have agreed to vote their units in
favour of the proposed transaction.
The transaction is the outcome of a previously announced review of
strategic alternatives conducted by the Joint Special Committee of the Board
of Trustees of the Fund (the "Special Committee"), formed in April 2008. CIBC
World Markets Inc., the Special Committee's financial advisor, conducted a
broad and thorough sale process for OFI by way of an auction and has provided
an opinion to the Special Committee and to the Board of Trustees of the Fund
that the consideration payable under the transaction is fair from a financial
point of view to unitholders of the Fund. The Fund's Board of Trustees has
unanimously determined (other than trustees having declared a conflict) that
the Agreement and the proposed transaction are fair to the Fund's unitholders
and in the best interests of the Fund and its unitholders. Accordingly, the
Board has unanimously recommended (other than trustees having declared a
conflict) that the unitholders vote in favour of the special resolution to
approve the proposed sale and the winding-up of the Fund.
"We are very pleased to support what we believe is an attractive
transaction for the Fund's unitholders. The transaction represents a positive
outcome for OFI, its unitholders, employees and customers. OFI, with its
strong presence in insulation in Canada, will be part of a much larger
organization, which will include CertainTeed's leading insulation operations
in the United States and gypsum wallboard operations in Canada" said George
Rossi, Chairman of the Special Committee.
"We are excited about partnering with CertainTeed as our combined
resources will allow us to better serve our customers and grow our business,"
commented Joseph Skarzenski, Chief Executive Officer of the Fund.
The all cash transaction will be financed by CertainTeed through existing
The Agreement provides for, among other things, a non-solicitation
covenant on the part of the Fund, subject to customary "fiduciary out"
provisions which entitle the Board of Trustees of the Fund to consider and
accept a Superior Proposal, subject to CertainTeed's right to match such
Superior Proposal or to receive a termination fee of $1.7 million.
A copy of the CIBC World Markets Inc. fairness opinion, factors
considered by the Special Committee and the Board and other relevant
background information will be included in the information circular to be
mailed within the coming weeks to the Fund's unitholders in advance of the
Meeting to consider the proposed transaction. Copies of the information
circular, the Agreement and certain related documents will be filed with
Canadian securities regulators and will be available at the Canadian SEDAR
website at www.sedar.com.
After closing of the transaction and the redemption of the Fund units,
the Fund will have no public unitholders, the Fund units will be de-listed
from the Toronto Stock Exchange and the Fund will cease to be a reporting
TD Securities Inc. is acting as financial advisor to CertainTeed in
connection with the transaction.
Certain statements contained in this discussion constitute
forward-looking information within the meaning of securities laws.
Forward-looking information may relate to the Fund's future outlook and
anticipated events, the Fund's business, its operations, its financial
performance, its financial condition or its results and, in some cases, can be
identified by terminology such as "may", "will", "should", "expect", "plan",
"anticipate", "believe", "intend", "estimate", "predict", "potential",
"continue" or other similar expressions concerning matters that are not
historical facts. Particularly, statements regarding the Fund's future
operating results and economic performance, the Fund's objectives and
strategies to achieve those objectives, and the results of the Fund's
strategic review process are forward-looking statements. Examples of such
statements include (i) the Fund's anticipated adjusted debt at closing, cash,
working capital, environmental remediation costs, transaction costs and
anticipated per unit redemption price, (ii) the various benefits to the Fund,
its unitholders, and employees associated with the completion of the sale
transaction, and (iii) the ability or desire of the parties to the transaction
agreements to fulfill their obligations thereunder. Actual results and
developments are likely to differ, and may differ materially, from those
expressed or implied by the forward-looking statements contained in this press
release. These statements are based on certain factors and assumptions
including, but not limited to: the approval by the unitholders of the Fund,
projected expenses and costs, debt and working capital levels, the projected
benefits to be derived from the transaction, expected growth, results of
operations, performance and business prospects and opportunities. While
management considers these assumptions to be reasonable based on information
currently available to it, they may prove to be incorrect. Forward
looking-information is also subject to certain factors, including risks and
uncertainties that could cause actual results to differ materially from what
management currently expects. These factors include the Fund's ability to
continue as a going concern, changes in market and competition, governmental
or regulatory developments, general economic conditions, credit availability,
compliance with the terms and conditions of the forbearance agreement, the
strength of the construction industry in North America, the fluctuations in
foreign currency, the development of new products and services, the
enhancement of existing products and services, the introduction of competing
products, many of which are beyond the Fund's control. Therefore, future
events and results may vary significantly from what management currently
foresees. For more exhaustive information on these risks and uncertainties you
should refer to the section entitled "Risks and Uncertainties" in the current
MD&A as well as the Annual Information Form for the year ended December 31,
2007, dated March 19, 2008 Forward-looking information contained in this
discussion is based on management's current estimates, expectations, and
projections, which management believes are reasonable as of the current date.
You should not place undue importance on forward-looking information and
should not rely upon this information as of any other date. While the Fund may
elect to, it is under no obligation (and expressly disclaims any such
obligation) and does not undertake to update or alter this information at any
particular time except as required under applicable securities legislation.
About OFI Income Fund
OFI is a manufacturer and distributor of a broad range of fibreglass
insulation products, including fibreglass ceiling tiles, designed for thermal
and acoustical applications and destined for the Canadian, U.S., and
international residential and non-residential/industrial markets. OFI has
242 employees as at June 30, 2008 and generated sales of approximately
$73 million for the fiscal year ended December 31, 2007. Additional
information is available at www.sedar.com or the company's website at
Through innovation and creative product design, the CertainTeed group of
companies has helped shape the building products industry for more than
100 years. Founded in 1904 as General Roofing Company, the firm made its
slogan "Quality Made Certain, Satisfaction Guaranteed," which quickly inspired
the name CertainTeed. Today, CertainTeed(R) is North America's leading brand
of exterior and interior building products, including roofing, siding,
windows, fence, decking, railing, trim, foundations, pipe, insulation, gypsum,
ceilings and access covers.
Headquartered in Valley Forge, Pa., CertainTeed and its affiliates have
more than 7,000 employees and more than 70 manufacturing facilities throughout
the United States and Canada. In 2007 the group had total sales of more than
$3 billion. www.certainteed.com.
For further information:
For further information: Edward Bowles, President of OFI Income Fund,
(613) 247-7116, Fax: (613) 736-7281, firstname.lastname@example.org