TRADING SYMBOL: Toronto Stock Exchange - GRO.UN
VANCOUVER, April 23 /CNW/ - Sun Gro Horticulture Income Fund (the Fund) today announced that the board of trustees of the Fund and the board of directors of the Fund's wholly owned subsidiary, Sun Gro Horticulture Canada Ltd. (Sun Gro or the company), have formally approved the Fund's conversion to a corporate structure by way of a statutory plan of Arrangement (the Arrangement) under section 192 of the Canadian Business Corporations Act and recommended the Arrangement for unitholder approval at the annual and special meeting of unitholders to be held on May 27, 2010. If approved, the Arrangement would result in the reorganization of the Fund's trust structure into a publicly listed corporation (New Sun Gro) which will continue to carry on, directly and indirectly, the business carried on by Sun Gro and its subsidiaries. Unitholders would receive, for each unit held, one common share of New Sun Gro on the effective date of the Arrangement. Details of the proposed conversion plan were first announced on March 17, 2010. A management information circular containing additional details about the Arrangement will be mailed to voting unitholders by the end of April 2010.
In conjunction with their review of the Arrangement, the board of trustees and the board of directors retained Evans & Evans, Inc. (Evans & Evans) to act as financial advisor. Evans and Evans is a Canadian boutique Investment Banking firm with offices and affiliates in Canada, the U.S. and Asia. Evans & Evans has provided the board of trustees and the board of directors with an opinion that, as at the date thereof and subject to the particular assumptions and considerations summarized therein, the terms of the Arrangement are fair, from a financial point of view, to unitholders of the Fund. The full text of the Evans & Evans fairness opinion will be included with the management information circular.
After duly considering the financial aspects and other considerations relating to the Arrangement, including the terms of the Arrangement, the advice of legal counsel, the fairness opinion of Evans & Evans, and the duties of the board of trustees and the board of directors, the board of trustees and the board of directors have approved the Arrangement, and have concluded that the Arrangement is fair, from a financial point of view, to unitholders and is in the best interests of the Fund, Sun Gro and unitholders. The board of trustees and the board of directors recommends that unitholders vote in favour of the Arrangement.
The board of trustees and the board of directors also approved the entering into of an arrangement agreement (the Arrangement Agreement) among the Fund, Sun Gro and New Sun Gro setting out the terms of the Arrangement. The Arrangement Agreement was executed on April 21, 2010. A copy of the Arrangement Agreement will be included in the management information circular.
The Fund, Sun Gro and New Sun Gro applied to the Supreme Court of British Columbia for an interim order to commence the process of securing the required court and unitholder approvals for the Arrangement. The interim order was granted April 22, 2010. A copy of the interim order will also be included in the management information circular. The Arrangement is subject to final court approval, as well as approval by not less than two-thirds of the votes cast by the unitholders voting in person or by proxy at the annual and special meeting of unitholders. Subject to the receipt of all necessary approvals, the Arrangement would be effective on or before December 31, 2010.
Forward Looking Information
This news release contains certain forward-looking statements within the meaning of applicable Canadian provincial securities laws. All statements, other than statements of historical fact, are forward-looking statements or information. When used in this news release, the words "anticipate", "will", "believe", "estimate", "expect", "intend", "target", "plan", "goals", "objectives", "pro forma", "forecast", "schedule", "may" and other similar words and expressions, identify forward-looking statements or information. These forward-looking statements or information relate to, among other things: the approval of the Arrangement by unitholders; the completion of the Arrangement; Sun Gro's ability to obtain the third party, regulatory and court approvals required in order to complete the Arrangement; the listing of the common shares of New Sun Gro on the Toronto Stock Exchange; and the timing of the completion of the Arrangement. These statements reflect the current views of the Fund with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Fund, are inherently subject to significant business, economic, political and social uncertainties and contingencies. Many factors, both known and unknown, could cause actual results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements contained in this news release and the Fund has made assumptions based on or related to many of these factors. Such factors include, without limitation risks relating to the ability of the Fund, Sun Gro and New Sun Gro to satisfy the conditions precedent to the completion of the Arrangement, some of which are outside the control of the Fund, including receipt of unitholder approval at the meeting, third party approvals, regulatory approvals, approval by the Toronto Stock Exchange of the substitutional listing of the New Sun Gro common shares to be issued pursuant to the Arrangement, approval of the transactions contemplated by the Arrangement by Sun Gro's principal lenders and the final order of the Supreme Court of British Columbia, the ability of Fund to complete the Arrangement on a fully tax-deferred basis to the Fund and unitholders, and those factors that have been identified under the caption "Risk Factors" in the Fund's Annual Information Form filed on SEDAR at www.sedar.com. Although the Fund has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. The Fund does not intend and does not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances where any other events affecting such statements or information, other than as required by applicable securities laws. Unitholders are cautioned against attributing undue reliance on forward-looking statements or information.
Income Fund Profile
Sun Gro Horticulture Income Fund was launched with the completion of an Initial Public Offering on March 27, 2002. Units of the Fund are listed for trading on the Toronto Stock Exchange. At April 23, 2010, there were 22,284,681 units of the Fund issued and outstanding.
Sun Gro is the largest producer and distributor of peat and bark-based growing mixes to professional plant growers in the US and Canada. It is also North America's largest producer and distributor or sphagnum peat moss, with approximately 65,000 acres of peat bogs under lease. Sun Gro sells its professional products primarily to greenhouse, nursery and specialty crop growers. The company also sells peat moss and potting mixes to retail customers, either by way of private label partnerships or under its own brand names. In addition, Sun Gro sells sand-based mixes to golf course developers and landscapers. The company's North America-wide production network now comprises 12 Canadian operating plants and 13 US operating plants.
SOURCE SUN GRO HORTICULTURE INCOME FUND
For further information: For further information: Bradley A. Wiens, Vice-President, Finance and CFO, Sun Gro Horticulture Income Fund, Tel: (425) 373-3603, Email: firstname.lastname@example.org, Website: www.sungro.com