TRADING SYMBOL: Toronto Stock Exchange - HWD.UN
This news release contains "forward looking information and statements"
within the meaning of applicable securities laws. A summary of the
forward looking information and statements are set out later in this
LANGLEY, BC, April 15 /CNW/ - Hardwoods Distribution Income Fund (the
"Fund") today announced that the Supreme Court of British Columbia has
approved the calling of a meeting of its unitholders to approve the
previously announced conversion from an income trust structure to a
publicly traded corporation called "Hardwoods Distribution Inc." at its
annual general and special meeting of unitholders scheduled for May 19,
2011. If approved by unitholders at the meeting and by the Supreme
Court of British Columbia, the conversion is expected to be completed
on July 1, 2011.
The Fund also announced today that it has entered into an arrangement
agreement with its subsidiaries and a support agreement (the "Support
Agreement") with Sauder Hardwoods Inc., Hardwoods Inc. and certain of
their affiliated entities and associates (the "Sauder Parties"). Sauder
Hardwoods Inc. and Hardwoods Inc. are the holders of a 20% interest in
the Fund's operating subsidiaries Hardwoods Specialty Products LP and
Hardwoods Specialty Products US LP (collectively, "Hardwoods") in the
form of special voting units of the Fund and Class B limited partner
units of Hardwoods (the "Retained Interest").
Pursuant to the Support Agreement, the Sauder Parties have agreed to
vote the 270,000 units and 3,602,500 special voting units of the Fund
held by them in favour of the special resolution approving the
conversion. The Sauder Parties have also agreed to amend the ratio at
which the Retained Interest may be exchanged from one unit of the Fund
to 0.3793 units of the Fund and to exchange their Retained Interest as
part of the conversion for common shares of Hardwoods Distribution Inc.
at the new exchange ratio, subject to the conversion becoming effective
on or before July 1, 2011.
The proposed conversion transaction was announced by the Fund in its
news release of April 5, 2011. Under the conversion transaction,
Hardwoods will continue to conduct the business but will now be wholly
owned by Hardwoods Distribution Inc. Holders of units of the Fund will
receive one common share of Hardwoods Distribution Inc. for each unit
of the Fund held by them and the Retained Interest will be exchanged
for common shares of Hardwoods Distribution Inc. at the new exchange
ratio. Upon completion of the conversion transaction, Sauder Hardwoods
Inc. and Hardwoods Inc. will hold an aggregate of 1,366,428 common
shares of Hardwoods Distribution Inc., representing approximately 8.56%
of the issued and outstanding shares, and the other Sauder Parties will
hold an aggregate of 270,000 common shares of Hardwoods Distribution
Inc., representing approximately 1.69% the issued and outstanding
It is expected that the Trustees of the Fund (Messrs. Holland, Purchase
and Wilson) and Messrs. Lawrence Sauder and William Sauder, all of whom
are the current directors of the general partner of Hardwoods Specialty
Products LP, will become the directors of Hardwoods Distribution Inc.,
and the current officers and management of Hardwoods will become
officers and management of Hardwoods Distribution Inc.
About the Fund
Hardwoods Distribution Income Fund is an unincorporated, open-ended,
limited purpose trust established to hold, indirectly, securities which
represent an 80% ownership interest in Hardwoods.
Hardwoods is one of North America's largest distributors of high-grade
hardwood lumber and sheet goods to the cabinet, moulding, millwork,
furniture and specialty wood products industries. The company currently
operates a network of 26 distribution centers in the U.S. and Canada.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
This news release includes forward-looking statements. These involve
known and unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements or industry results to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements.
These forward-looking statements are identified by the use of terms and
phrases such as "anticipate", "believe", "estimate", "expect", "may",
"plan", "will", and similar terms and phrases, including references to
assumptions. Such statements may involve, but are not limited to,
comments with respect to the completion of the conversion of the Fund
from an income trust structure to a publicly traded corporation.
These forward looking statements reflect current expectations of the
Fund's management regarding future events and operating performance as
of the date of this news release. Forward-looking statements involve
significant risks and uncertainties, should not be read as guarantees
of future performance or results, and will not necessarily be accurate
indications of whether or not such results will be achieved. A number
of factors could cause actual results to differ materially from the
results discussed in the forward-looking statements, including, but not
limited to: national and local business conditions; political or
economic instability in local markets; competition; consumer
preferences; spending patterns and demographic trends; legislation or
Although the forward-looking statements contained in this news release
are based upon what management believes to be reasonable assumptions,
the Fund cannot assure investors that actual results will be consistent
with these forward-looking statements. The forward-looking statements
reflect management's current beliefs and are based on information
currently available to the Fund.
All forward-looking information in this news release is qualified in its
entirety by this cautionary statement and, except as may be required by
law, the Fund undertakes no obligation to revise or update any forward
looking information as a result of new information, future events or
otherwise after the date hereof.
SOURCE Hardwoods Distribution Income Fund
For further information:
Chief Financial Officer
Phone: (604) 881-1990
Fax: (604) 881-1995