EDMONTON, June 29, 2011 /CNW/ - K-Bro Linen Inc. ("K-Bro" or the
"Corporation") today announced that it has reached an agreement to
acquire all of the assets and operations of Les Buanderies Pierre R.
Dextraze Inc. ("Dextraze") (www.dextraze.ca) for cash consideration of $4.2 million, including an amount contingent
upon achieving certain EBITDA targets.
Established in 1981, Dextraze is a privately owned and operated
commercial/industrial laundry which provides services to the
hospitality industry in the Montréal area. It is one of the leading
processors in Québec and currently operates 7 days per week with over
100 employees. For the year ended July 31, 2010, Dextraze recorded
revenue of $4.0 million and adjusted EBITDA of $0.7 million. Dextraze's
customer base is focused on the high-end hospitality market, including
bed linen, towels and banquet linen.
Dextraze will continue to be branded and operate in the local market as
Les Buanderies Dextraze. Ms. Stany Bergeron and Mr. Eric Ouellette, the
two managing partners, will continue to lead Dextraze's business and
will join the leadership team of K-Bro.
"Our vision includes growing K-Bro's businesses through acquisitions
that have an excellent strategic fit and build shareholder value," said
Linda McCurdy, President and CEO. "This acquisition delivers on that
vision as it expands K-Bro's products and services into Montréal, a key
market for K-Bro. We are extremely excited about the opportunity to
acquire a well-managed business such as Dextraze, whose people share
our vision of safety, quality and on-time delivery. In addition, we are
confident that Dextraze's committed, well-trained and experienced
management and employee team will fit in well with the K-Bro culture.
We are excited about growing Dextraze's business in the second largest
market in Canada."
"We are very happy to be joining the K-Bro family," said Stany Bergeron.
"This transaction immediately positions Dextraze to leverage the
collective experience that K-Bro has repeatedly demonstrated across the
country. Together we will be able to pursue additional contracts and
clients, expand our service offering and increase our market share in
both greater Montréal and Québec."
K-Bro is the largest owner and operator of laundry and linen processing
facilities in Canada. K-Bro provides a comprehensive range of general
linen and operating room linen processing, management and distribution
services to healthcare institutions, hotels and other commercial
accounts. K-Bro currently has seven processing plants in six Canadian
cities: Québec City, Toronto, Edmonton, Calgary, Vancouver and
Additional information regarding the Corporation including required
securities filings are available on our website at www.k-brolinen.com and on the Canadian Securities Administrators' website at www.sedar.com; the System for Electronic Document Analysis and Retrieval ("SEDAR").
Throughout this News Release, and other documents referred to, and in
order to provide a better understanding of the financial results, K-Bro
uses the terms "EBITDA", "distributable cash flow" and "payout ratio".
These terms do not have any standardized meaning under International
Financial Reporting Standards ("IFRS") as issued by the International
Accounting Standards Board. Therefore, EBITDA, distributable cash flow
and payout ratio may not be comparable to similar measures presented by
EBITDA is defined by management as revenue less operating expenses which
represents income from operations before amortization.
FORWARD LOOKING STATEMENTS
This News Release contains forward-looking information that represents
internal expectations, estimates or beliefs concerning, among other
things, future activities or future operating results and various
components thereof. The use of any of the words "anticipate",
"continue", "expect", "may", "will", "project", "should", "believe",
and similar expressions suggesting future outcomes or events are
intended to identify forward-looking information. Statements regarding
such forward-looking information reflect management's current beliefs
and are based on information currently available to management.
These statements are not guarantees of future performance and are based
on management's estimates and assumptions that are subject to risks and
uncertainties, which could cause K-Bro's actual performance and
financial results in future periods to differ materially from the
forward-looking information contained in this News Release. These
risks and uncertainties include, among other things, (i) risks
associated with acquisitions, including the possibility of undisclosed
material liabilities; (ii) K-Bro's competitive environment; (iii)
utility and labour costs; (iv) K-Bro's dependence on long-term
contracts with the associated renewal risk;, (v) increased capital
expenditure requirements; (vi) reliance on key personnel; (vii)
changing trends in government outsourcing; and (viii) the availability
of future financing. Material factors or assumptions that were applied
in drawing a conclusion or making an estimate set out in the
forward-looking information include: (i) volumes and pricing
assumptions; (ii) utility costs; (iii) expected impact of labour cost
initiatives; and (iv) the level of capital expenditures. Although the
forward-looking information contained in this News Release is based
upon what management believes are reasonable assumptions, there can be
no assurance that actual results will be consistent with these
forward-looking statements. Certain statements regarding
forward-looking information included in this News Release may be
considered "financial outlook" for purposes of applicable securities
laws, and such financial outlook may not be appropriate for purposes
other than this News Release.
All forward-looking information in this News Release is qualified by
these cautionary statements. Forward-looking information in this News
Release is presented only as of the date made. Except as required by
law, K-Bro does not undertake any obligation to publicly revise these
forward-looking statements to reflect subsequent events or
SOURCE K-Bro Linen Inc.
For further information:
| Linda McCurdy || Christopher Burrows |
| President & Chief Executive Officer || Vice-President & Chief Financial Officer |
| || |
| K-Bro Linen Inc. (TSX: KBL) || |
| Phone: 780.453.5218 || |
| Email: email@example.com || |
| Web: www.k-brolinen.com |