Armtec Announces Strategic Acquisitions, Bought Deal Financing and Proposed Transaction


    Toronto Stock Exchange: ARF.UN

    GUELPH, ON, June 25 /CNW/ - Armtec Infrastructure Income Fund (the
"Fund") (TSX: ARF.UN) today announced that it has entered into an agreement
with Clearford Industries Inc. ("Clearford") to acquire the assets of its
Brooklin Concrete division ("Brooklin") and the shares of Boucher Pre-cast
Concrete Ltd. ("Boucher"). The aggregate purchase price is approximately
$65 million, subject to working capital adjustments. The Fund has also entered
into an agreement with Scotia Capital Inc. and TD Securities Inc. for a bought
deal private placement offering of Fund units for gross proceeds of
approximately $37.5 million. As well, the Fund has entered into a non-binding
letter of intent to purchase a Western Canadian based manufacturer of precast
concrete products.

    Clearford Transaction

    For the 12-month period ended March 31, 2008, the Brooklin and Boucher
businesses generated, in the aggregate, approximately $43 million of revenue.
The purchase price payable for the Brooklin assets is approximately
$43 million, of which $3 million will be paid in securities which are
exchangeable into units of the Fund. Two-thirds of those securities will be
held in escrow for two years to support Clearford's obligations under the
purchase agreement. The purchase price payable for the Boucher shares is
approximately $22 million, of which $5 million will be paid by way of a
promissory note over a five-year period. The transactions are expected to
close simultaneously on or about July 31, 2008 and are subject to satisfaction
of customary closing conditions, including approval of the transaction by the
shareholders and convertible debenture holders of Clearford. The Toronto Stock
Exchange ("TSX") must approve the issuance of the Armtec units and Clearford
must also obtain approval from the TSX Venture Exchange.
    "Our acquisition of Brooklin and Boucher expands the geographic scope of
our successful precast business," said Charles M. Phillips, President and
Chief Executive Officer. "The transactions build on our acquisitions of
Con-Force and A.E. Concrete Precast Products, and increase the range of
products and services that we can offer to customers in Ontario and Quebec.
Brooklin and Boucher supply both standard precast products and structural
components and this will enable us participate in a broad range of projects
that cover the breadth of precast solutions from the Pacific Ocean to Western
    Founded in 1952, Brooklin is the leading manufacturer of septic tanks in
Ontario. Brooklin also manufactures precast concrete products, including patio
stones, retaining walls, transformer foundations, and switching chambers.
Brooklin has four plants in Ontario, located in Brooklin, Newmarket,
Huntsville and Haliburton.
    Founded in 1954, Boucher specializes in commercial tanks, bridges, box
culverts, train boxes, barriers, transformer base and pads, electrical
manholes, well tile, parking curbs, pump chambers, concrete panels and
segmental rings for tunnelling projects. Boucher's facilities are located in
Ottawa, Ontario and primarily service the Greater Toronto area, North Bay,
Sudbury and the Ottawa region.

    Transaction Highlights

      -  The acquisitions will provide greater cash flow stability through
         diversification of customers, products and geography and will be
         immediately accretive to the Fund's cash available for distribution.

      -  Through its Con-Force division, the Fund is one of the leading
         manufacturers of precast and pre-stressed concrete structures in
         Western Canada with high value-added engineered products, a diverse
         customer base that includes government, commercial and industrial
         clients. These acquisitions support the Fund's leadership position
         in this industry as well as its geographic expansion strategy.

      -  Brooklin's and Boucher's products will be complementary to the
         Fund's current product offering, through the addition of engineered
         concrete solutions for a variety of infrastructure applications,
         including bridges and building applications.

      -  The acquisitions will provide significant future growth
         opportunities as:

         -  The outlook for general infrastructure growth due to increased
            government and private sector spending remains positive.

         -  Precast and pre-stressed concrete solutions represent a growing
            product category.

         -  Acquisition opportunities exist across Canada based on the
            fragmented nature of the precast concrete industry.

    Scotia Capital Inc. acted as exclusive financial advisor to Armtec and
the Fund on the acquisition.

    Bought Deal Financing

    The Fund also announced today that it had entered into an agreement with
Scotia Capital Inc. and TD Securities Inc. for a bought deal private placement
offering of Fund units priced at $24.15 per unit for gross proceeds of
approximately $37.5 million. The offering is subject to TSX approval and other
customary conditions and is scheduled to close on July 10, 2008. The Fund
units will be subject to resale restrictions for a four-month period following
the closing date under applicable Canadian securities laws.
    The net proceeds from the offering will be used by the Fund to finance
potential acquisitions, including the acquisition of the assets of Brooklin
and the acquisition of the shares of Boucher if, as and when completed,
general business purposes and/or the repayment of outstanding indebtedness of
the Fund and its subsidiaries. Closing of the offering is not conditional on
the completion of the Brooklin and Boucher acquisitions.
    The securities to be offered have not been registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold in the
United States absent registration or an applicable exemption from the
registration requirements. This news release shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sale of the
securities in any state in which such offer, solicitation or sale would be

    Proposed Transaction

    Armtec has also entered into a non-binding letter of intent to purchase a
Western Canadian based manufacturer of precast concrete products for
approximately $50 million. Completion of the transaction will depend upon a
number of conditions including, without limitation, satisfactory results of a
due diligence review being undertaken by the Fund and the negotiation of a
definitive purchase agreement. There can be no assurance that a definitive
agreement will be entered into.

    About Armtec

    The Fund is a leading manufacturer and marketer of a broad range of
infrastructure products and engineered bridging solutions for application in a
diverse cross-section of industries. These include the public infrastructure
market and private sector markets such as natural resources, commercial
building, residential construction and agricultural drainage in Canada. The
Fund's Armtec division is Canada's only national multi-material manufacturer
specializing in corrugated high density polyethylene pipe, and corrugated
steel pipe for drainage applications and highly engineered solutions including
bridging products and water management systems. The Con-Force division designs
and manufactures a wide range of bridging and construction products including
the advanced "NU" bridge girder system that allows for some of the longest
spans available in precast concrete technology. The Durisol division designs
and manufactures highway noise barriers and related infrastructure products,
such as retaining walls and acoustic enclosures, and is recognized as the only
fully qualified supplier for absorptive material in Ontario. For further
information, please visit Armtec's website at Armtec
Infrastructure Income Fund is listed on the Toronto Stock Exchange, under the
trading symbol ARF.UN

    Forward-Looking Statements

    This news release contains certain statements that constitute
forward-looking information within the meaning of applicable securities laws
("forward-looking statements"). All statements other than statements of
historical fact contained herein are forward-looking statements, including,
without limitation, statements regarding the future financial position, cash
distributions, business strategy, proposed acquisitions (including the
Brooklin and Boucher acquisitions and their impact on the Fund's financial
performance), budgets, litigation, projected costs and plans and objectives of
or involving the Fund or the businesses in which it has invested. Prospective
investors can identify many of these statements by looking for words such as
"believe", "expects", "will", "intends", "projects", "anticipates",
"estimates", "continues" and similar words or the negative thereof. There can
be no assurance that the plans, intentions or expectations upon which these
forward-looking statements are based will occur. 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
    By their nature, forward-looking statements require assumptions and are
subject to inherent risks and uncertainties, including those discussed herein.
There is significant risk that forward-looking statements will not prove to be
accurate. You are cautioned not to place undue reliance on forward-looking
statements made herein because a number of factors could cause actual future
results, conditions, actions or events to differ materially from the targets,
expectations, estimates or intentions expressed in the forward-looking
    The future outcomes that relate to forward-looking statements may be
influenced by many factors, including but not limited to: industry
cyclicality; competition; reduction in demand for products; collection from
customers; relationships with suppliers; lack of long-term agreements;
expiration of rights under licence and distribution arrangements; raw material
price volatility; product liability; intellectual property; reliance on key
personnel; environmental; collective bargaining; interest rates; uninsured and
underinsured losses; operating hazards; risks of future legal proceedings;
dependence on other Armtec entities; income tax matters; leverage and
restrictive covenants; credit facilities; nature of units; distribution of
securities on redemption or termination of Fund; restrictions on potential
growth; effect of market interest rates on price of Units; undiversified and
illiquid holdings in Armtec Operating Trust; potential dilution; and various
risks relating to the Brooklin and Boucher acquisitions and other proposed
acquisitions, including risks relating to integration and realization of
expected synergies, Brooklin and Boucher's reliance on key personnel,
potential undisclosed liabilities associated with the Brooklin and Boucher
acquisitions and other proposed acquisitions, and Armtec's limited recourse
against the vendors of Brooklin and Boucher. You are cautioned that the
foregoing list of factors 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 these factors, as well as other
uncertainties and potential events, and the inherent uncertainty of
forward-looking statements.
    The forward-looking statements contained herein are expressly qualified
in their entirety by this cautionary statement. The Fund undertakes no
obligation to publicly update or revise any forward-looking statements except
as expressly required by applicable securities law.
    Risks related to the Fund have been summarized in the Fund's latest
Annual Information Form, Management's Discussion and Analysis included in the
Annual Report and quarterly financial reports available on or
the Fund's web site at

For further information:

For further information: Charles M. Phillips, President & Chief
Executive Officer, Armtec Limited Partnership, Tel: (519) 822-0210, Fax: (519)
822-8894; James R. Newell, Chief Financial Officer, Armtec Limited
Partnership, Tel: (519) 822-0210, Fax: (519) 822-8894; Carrie Boutcher, Vice
President, Finance, Armtec Limited Partnership, Tel: (519) 822-0210, Fax:
(519) 822-8894

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