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EDMONTON, Feb. 27 /CNW/ - K-Bro Linen Income Fund (TSX: KBL.UN) ("K-Bro"
or the "Fund") announced today that it has completed its previously-announced
bought deal offering of 1,362,000 units of the Fund ("Units") at a price of
$12.85 per Unit, for gross proceeds of approximately $17.5 million. The Fund
has also granted the Underwriters an over-allotment option, exercisable in
whole or in part for a period of 30 days following closing, to purchase up to
an additional 204,300 Units at the same offering price. If the over-allotment
option is fully exercised, the total gross proceeds to the Fund will be
approximately $20.1 million.
The offering was underwritten by a syndicate led by TD Securities Inc.
and which included National Bank Financial Inc., Blackmont Capital Inc.,
Dundee Securities Corp., Cormark Securities Inc. and Canaccord Capital
Corporation (collectively, the "Underwriters"). The Units are listed for
trading on the Toronto Stock Exchange.
The Fund intends to use the net proceeds of the offering to repay
indebtedness, including indebtedness incurred in connection with the
previously-announced acquisition of the assets of Buanderie H.M.R. Inc.
("HMR") and the retrofitting and equipping of the new Calgary facility. The
acquisition of HMR gives K-Bro a significant presence in the Quebec City
market and presents opportunities for expanding K-Bro's healthcare business in
a new marketplace. The new Calgary facility, which will service the Calgary
Health Region under a new and expanded ten-year agreement as well as K-Bro's
Calgary hospitality customers, is expected to commence operations in March
2008. This state-of-the-art facility will process increased volumes under the
new Calgary Health Region contract and is expected to meet the growth plans of
the Calgary Health Region and allow K-Bro to seize other available
opportunities in a growing Calgary region. Management expects to realize
labour and operational efficiencies, once the transition to the new plant is
complete, due to the highly automated nature of the new facility.
This news release shall not constitute an offer to sell, or the
solicitation of an offer to buy, any securities in any jurisdiction. The Units
being offered have not been and will not be registered under the U.S.
Securities Act of 1933 and state securities laws. Accordingly, the Units may
not be offered or sold in the United States except pursuant to applicable
exemptions from registration.
K-Bro is the largest owner and operator of laundry and linen processing
facilities in Canada. The company provides a comprehensive range of general
linen and operating room linen processing, management and distribution
services to large healthcare institutions, hotels and other commercial
accounts. K-Bro currently owns and operates laundry and linen processing
facilities in six Canadian cities: Toronto, Edmonton, Calgary, Vancouver,
Victoria and Quebec City.
Further information can be found in the disclosure documents filed by
K-Bro Linen Income Fund with the securities regulatory authorities, available
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This news release contains forward-looking information that represents
internal expectations, estimates or beliefs. Certain statements contained
within this news release constitute forward-looking statements. The use of any
of the words "anticipate", "continue", "estimate", "expect", "may", "will",
"project", "intend", "should", "believe" or the negative forms thereof and
similar expressions and variations thereof, are intended to identify
The expectations, estimates and beliefs contained in such forward-looking
statements necessarily involve known and unknown risks and uncertainties which
may cause the Fund's actual performance and financial results in future
periods to differ materially from any expectations, estimates and beliefs of
future performance or results expressed or implied by such forward-looking
statements. These risks and uncertainties include, among other things,
(i) risks associated with the acquisition of HMR, including the possibility
that K-Bro has paid more than the acquired company or assets are worth; the
additional expense associated with completing an acquisition and amortizing
any acquired intangible assets; the difficulty of assimilating the operations
and personnel of the acquired business; the possibility of undisclosed
material liabilities; the challenge of implementing uniform standards,
controls procedures and policies throughout the acquired business; the
inability to integrate, train, retain and motivate key personnel of the
acquired business; the potential disruption of K-Bro's ongoing business and
the distraction of management from its day-to-day operations; and the
inability to incorporate acquired businesses successfully into K-Bro's
operations. In addition, K-Bro may not be able to maintain the levels of
operating efficiency that HMR had achieved (or might have achieved) as a
separate business; (ii) K-Bro's competitive environment, (iii) utility costs,
(iv) K-Bro's dependence on long-term contracts, (v) increased capital
expenditure requirements; (vi) reliance on key personnel; (vii) the
availability of future financing, and such other risks and uncertainties as
described in the "Risk Factors" section of the Fund's Annual Information Form,
the "Critical Risks and Uncertainties" and other sections of the Fund's
Management's Discussion and Analysis and the Fund's Consolidated Financial
Statements, and in our other periodic filings with Canadian securities
regulatory authorities. All forward-looking statements presented herein should
be considered in conjunction with such filings. Accordingly, unitholders of
the Fund and potential investors are cautioned that events or circumstances
could cause actual results to differ materially from those discussed.
Forward-looking statements in this news release speak only as of the date
made. Except as required by applicable law, the Fund does not undertake any
obligation to publicly revise these forward-looking statements to reflect
subsequent events or circumstances.
For further information:
For further information: Linda McCurdy, President & CEO, (780) 453-5218
x.27, email@example.com or Doug Thomson, C.A., Vice President &
CFO, (780) 453-5218 x.26, firstname.lastname@example.org