TerraVest Income Fund announces substantial issuer bid for its units

VEGREVILLE, AB, July 11, 2012 /CNW/ - TerraVest Income Fund ("TerraVest" or the "Fund") (TSX: TI.UN) today announced a substantial issuer bid (the "Offer") pursuant to which the Fund will offer to purchase for cancellation up to 5,000,000 of the issued and outstanding Units for TerraVest from Unitholders (the "Unitholders") at the purchase price of $2.75 per Unit (the "Purchase Price"). The Offer of $2.75 per Unit represents a 51% premium to the closing price of $1.82 on July 11, 2012.

If more than 5,000,000 Units (or such greater number of Common Shares as the Company may determine it is willing to take-up and pay for) are properly tendered under the Offer, the Fund will take-up and pay for at the Purchase Price the deposited Units on a pro-rata basis according to the number of Units deposited (or deemed to be deposited) by the Unitholders (with adjustments to avoid the purchase of fractional Units). The Fund has reserved the right to at any time and from time to time to amend its offer to increase or decrease the maximum number of Units the Fund may purchase pursuant to the Offer. The Offer is not conditional on any minimum number of Units being deposited. TerraVest will fund any purchases of the Units pursuant to the Offer from cash available on hand and available credit facilities.

As of July 11, 2012, there were 19,720,466 Units issued and outstanding, and accordingly, the Offer is for up to approximately 25.35% of the total number of issued and outstanding Units. The Offer is subject to various conditions typical of transactions of this nature. It is anticipated that the offer to purchase and issuer bid circular and other related documents (the "Offer Documents"), containing the terms of the Offer and the instructions for tendering the Units will be mailed to Unitholders and filed with the applicable securities regulators on or about July 16, 2012. The Offer will remain open for acceptance for at least 35 days after the date of commencement, unless withdrawn or extended by the Fund.

Pennock Acheson Nielsen Devaney, Chartered Accountants ("PAND") was engaged by the Board of Trustees of the Fund to prepare a formal valuation with respect to the Units (the "Valuation"). A copy of the Valuation prepared by PAND will be attached to the Offer Documents.

The Trustees of the Fund believe that the purchase of Units under the Offer represents an effective use of TerraVest's financial resources and is in the best interests of its Unitholders as the recent trading price range of the Units is not fully reflective of the value of the Fund's business and future prospects.

In addition, neither the Fund nor its Board of Trustees makes any recommendation to Unitholders as to tender or refrain from tendering their Units to the Offer. Unitholders are strongly encouraged to review the Offer Documents carefully and to consult with their financial and tax advisors prior to making any decision about the Offer.

About TerraVest Income Fund

The Fund has investments in two portfolio businesses:

  • RJV Gas Field Services, one of Canada's largest providers of wellhead processing equipment for the natural gas industry in western Canada; and
  • Diamond Energy Services, a market leader in providing well servicing to the oil and natural gas sector in south-western Saskatchewan.

Caution Regarding Forward-Looking Statements

This news release contains forward-looking statements.  All statements other than statements of historical fact contained in this news release are forward-looking statements, including, without limitation, statements regarding our strategic direction and evaluation of the portfolio businesses and the Fund as a whole, the sale or potential sale of portfolio businesses or assets thereof, and other plans and objectives of or involving the Fund. Readers can identify many of these statements by looking for words such as "expects" and "will" and similar words or the negative thereof. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.

By their nature, forward-looking statements require us to make assumptions and, accordingly, forward looking statements are subject to inherent risks and uncertainties. There is significant risk that the forward-looking statements will not prove to be accurate. We caution readers of this news release not to place undue reliance on our forward-looking statements because a number of factors may cause actual future circumstances, results, conditions, actions or events to differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements and the assumptions underlying the forward-looking statements. 

Assumptions and analysis about the performance of the Fund as a whole and the Fund's portfolio businesses, the markets in which the portfolio businesses compete and the prospects and values of the portfolio businesses are considered in setting the business plan for the Fund, in evaluating and forecasting tax horizon, capital investments, outlook for operations, financial position, results and cash flow, other plans and objectives and in making related forward-looking statements. Such assumptions include, without limitation, the current tax regime in Canada remaining unchanged and the performance of the continuing portfolio businesses of the fund not differing materially from historic performance. Should any of these factors or assumptions vary, actual results may differ materially from the forward-looking statements.

The information set forth under "Risk Factors" in the annual information form of the Fund dated March 5, 2012 and under "Financial Instruments" in the MD&A of the Fund for the period ended March 31, 2012, identifies risk factors that could affect the operating results and performance of the Fund and its portfolio businesses and the values of the portfolio businesses and the Fund as a whole. We caution that the lists of factors discussed in such information is not exhaustive and that, when relying on forward-looking statements to make decisions with respect to the Fund, investors and others should carefully consider the factors discussed, as well as other uncertainties and potential events, and the inherent risks and uncertainties of forward-looking statements.  The forward-looking statements herein are made based on the assumption that the Fund will not be affected by such risks, but that, if the Fund is affected by such risks, the forward-looking statements may become inaccurate.

The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.  The forward-looking statements included in this news release are made as of the date of this news release.  Except as required by applicable securities laws, the Fund does not undertake to update such forward-looking statements.

SOURCE TerraVest Income Fund

For further information:

Dale Laniuk
TerraVest Income Fund
Chief Executive Officer
(780) 632 -7774


Paul A. Casey, CA
TerraVest Income Fund
Chief Financial Officer
(780) 632-2040

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TerraVest Income Fund

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