Golf Town Income Fund enters into definitive transaction agreement with OMERS Capital Partners and announces Q2 2007 financial results



    
    - Unitholders to receive $17.15 per unit in cash
    - Strong Q2 2007 results despite late start to golf season
    

    MARKHAM, ON, Aug. 13 /CNW/ - Golf Town Income Fund (TSX:GLF.UN) ("Golf
Town" or the "Fund") announced today that it has entered into a definitive
Transaction Agreement (the "Agreement") with OMERS Capital Partners ("OCP"),
the entity responsible for OMERS Administration Corporation's ("OMERS")
private equity investments. OMERS is one of Canada's largest pension plans,
with more than $48 billion in assets invested around the world. Under the
terms of the Agreement all of the assets of Golf Town Limited Partnership will
be acquired for proceeds equal to $17.15 per outstanding Golf Town Unit on a
fully diluted basis. Such proceeds are expected to be paid to Golf Town's
Unitholders by way of redemption and/or other distribution in respect of the
outstanding Golf Town Units. Subsequent to the redemption of the Units, Golf
Town will be wound up.
    "This transaction provides significant value and liquidity to our
Unitholders, while preserving the opportunity to surface even greater value
during the go shop process," said Marshall Cohen, the Chairman of the Board of
Trustees of Golf Town. "The transaction is also positive for our employees,
vendors, and customers because of the opportunity they have in partnering with
OMERS, which has an outstanding track record in building strong enterprises
and which shares our commitment to our customers, employees and the markets we
serve."
    Paul Renaud, President & CEO at OCP, said: "Golf Town is a real Canadian
success story. We are investing with an exceptional management team and are
very excited about the opportunity to continue to grow the business."
    The completion of the transaction is subject to the approval of Golf
Town's Unitholders at a special meeting which is expected to be held on
September 21, 2007. Golf Town has set August 21, 2007 as the record date for
the special meeting. The Board of Trustees of Golf Town, other than Trustees
who are also senior management of Golf Town (who were not eligible to vote in
respect of the transaction), has unanimously approved the transaction and
unanimously recommends that Unitholders vote for the approval of the proposed
transaction with OCP.
    The transaction must be approved by the holders of Units and Special
Voting Units representing more than 66 2/3% of the Units and Special Voting
Units represented at the meeting and by the holders of more than 50% of the
Units and Special Voting Units, other than Units and Special Voting Units held
by members of senior management of Golf Town, represented at the meeting.
    Golf Town's financial advisor, BMO Capital Markets, has provided an
opinion to the Board of Trustees that the consideration to be received by Golf
Town's Unitholders under the transaction is fair from a financial point of
view to Unitholders (other than Unitholders who are members of senior
management of Golf Town, in respect of whom no opinion is expressed). TD
Securities is acting as financial advisor to OCP in connection with this
transaction.
    The Agreement contains a go shop provision pursuant to which the Fund has
the right to solicit and engage in discussions and negotiations with respect
to potential competing proposals through the go shop period, which ends on
September 19, 2007.
    After September 19, 2007, Golf Town is subject to a no shop restriction
on its ability to solicit third party proposals, provide information and
engage in discussions with third parties. The no shop provision is subject to
a fiduciary out that allows Golf Town, subject to certain conditions, to
provide information and participate in discussions with respect to any
unsolicited acquisition proposal received after September 19, 2007 which the
Board of Trustees has determined in good faith constitutes or is reasonably
likely to result in a Superior Acquisition Proposal.
    Golf Town may terminate the Agreement under certain circumstances,
including if the Board of Trustees determines in good faith it has received a
Superior Acquisition Proposal. Golf Town has agreed to provide OCP with notice
of any Superior Acquisition Proposal and to negotiate with OCP for a period of
three business days prior to accepting a Superior Acquisition Proposal. If
Golf Town terminates the Agreement in order to accept a Superior Acquisition
Proposal it must pay a fee of approximately $3.2 million to OCP if such
termination occurs during the go shop period or approximately $7.1 million if
such termination occurs following the go shop period.
    OCP has represented to Golf Town that it has obtained equity and debt
financing commitments for the transactions contemplated by the Agreement, the
aggregate proceeds of which will be sufficient to pay the aggregate sale
consideration and related fees and expenses. Completion of the transaction is
subject to various customary conditions precedent. Golf Town and OCP expect to
close the transaction on or about September 28, 2007. If the transaction
closes on or before October 1, 2007 Unitholders will not receive the
distribution for the month of September. If the transaction closes on or after
October 2, 2007, Unitholders will receive the distribution for the month of
September, estimated to be $0.104 per Unit.
    Golf Town also announced the financial results of the second quarter
ended June 30, 2007. In the second quarter of fiscal 2007, Golf Town total
sales grew to $94.3 million, an increase of 14.9 per cent over the $82.1
million recorded for the comparable period in 2006. The growth in sales was
attributable to the addition of new stores and strong same store sales of
3.6%.
    Golf Town's 2007 spring store openings have included new stores in
Dartmouth, Nova Scotia, Boisbriand, Quebec, St. Catharines, Ontario and
Brampton, Ontario. Two more stores in Ottawa and Windsor, Ontario are planned
for later this year.
    Golf Town's EBITDA increased by $2.5 million or 17.2% over the comparable
period in 2006, resulting in EBITDA of $17.0 million for the quarter.
    Said Stephen Bebis, President and Chief Executive Officer, "The golf
season didn't start until late April this year. Despite the slow start, strong
sales in May and June have resulted in another solid quarter for Golf Town.
The golf season continues to be strong into Q3."
    Gross profit increased to $34.0 million in the second quarter, a gain of
14.5 per cent compared to $29.7 million in the second quarter of 2006.
    Said Bebis: "All of the major golf brands have had a good year with new
product introductions. Demand for the new square head technology introduced by
Callaway and Nike is expected to continue to be strong for the rest of the
season and into next year."

    Golf Town was founded in 1998 and is now the largest golf retailer in
Canada with 32 stores across the country. Golf Town Income Fund units are
traded on the Toronto Stock Exchange under the symbol GLF.UN.

    %SEDAR: 00021322E




For further information:

For further information: Michael Rousseau, Chair of the Special
Committee, (416) 861-4904; Stephen Bebis, President and CEO Golf Town, (905)
479-0343

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GOLF TOWN INCOME FUND

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