Sun Gro completes Quebec acquisition, strengthens long-term peat moss supply

    Trading Symbol: The Toronto Stock Exchange - GRO.UN

    VANCOUVER, Aug. 7 /CNW/ - Sun Gro Horticulture Income Fund (the Fund)
today announced that its wholly owned subsidiary, Sun Gro Horticulture Canada
Ltd. (Sun Gro or the company), has acquired Quebec peat moss producer
Tourbiere Omer Belanger Inc. for $3.9 million. The transaction was funded
through Sun Gro's existing acquisition line of credit and is expected to be
accretive to the Fund's unitholders beginning in 2008.
    This acquisition, which closed on August 6, 2007, has given Sun Gro a
physical presence in Quebec while strengthening its long-term peat supply and
enhancing the geographic diversity of its peat harvest resources. The purchase
included 1,900 acres of largely undeveloped professional-grade peat bogs, 140
acres of retail-grade bogs and three adjacent production facilities. With
planned expansion of the harvest area this summer, the newly-acquired bogs are
expected to add approximately 500,000 equivalent bales (Sun Gro's standard
unit of volume measurement, referring to 10 cubic feet of peat) to the
company's 2008 harvest.
    "At current peat prices and foreign exchange rates, the Tourbiere Omer
Belanger holdings could support $4.5 million in additional sales beginning
next year, and grow from there," said Mitch Weaver, President and CEO of Sun
Gro and a Trustee of the Fund, adding that, "The new bogs will help ensure our
ability to provide high-quality peat to our core professional grower
customers, who remain our primary focus."
    The transaction was Sun Gro's third acquisition in 2007. In January, the
company established a local manufacturing presence in California, North
America's largest horticultural market, by acquiring Sun-Up Horticulture in
Sacramento and Kellogg-Rich Grow, LLC in Santa Maria. Sun Gro now operates 14
Canadian peat and peat-mixing plants and 11 US peat and bark-mixing plants,
and has approximately 63,000 acres of peat bogs under lease.

    Income Fund Profile

    Sun Gro Horticulture Income Fund was launched with the completion of an
Initial Public Offering of 22,023,000 trust units on March 27, 2002. The Fund
is dependent on Sun Gro's operations, with monthly distributions to its
unitholders based entirely on Sun Gro's performance.

    Company Profile

    Sun Gro was founded in 1929 in Vancouver, BC and has grown to become
North America's largest producer of sphagnum peat, and the largest distributor
of peat moss and peat and bark-based growing media to professional plant
growers in the US and Canada. Sun Gro sells its professional products
primarily to greenhouse, nursery and specialty crop growers, as well as to
golf course developers and landscapers. Sun Gro also sells peat moss and
peat-based growing mixes to retail customers, either by way of private label
partnerships or under its own brand names. Approximately 80% of the company's
sales volume goes to the US.

    Forward-Looking Statements

    This news release contains forward-looking statements. These statements
relate to future events or future performance and reflect Sun Gro's
expectations regarding its growth, results of operations, performance,
business prospects, opportunities or industry performance or trends. These
forward-looking statements reflect management's current internal projections,
expectations or beliefs and are based on information currently available. In
some cases, forward-looking statements can be identified by terminology such
as "may", "will", "should", "expect", "intend", "plan", "anticipate",
"believe", "predict", "potential", "continue" or the negative of these terms
or other comparable terminology. A number of factors could cause actual events
or results to differ materially from those discussed in the forward-looking
statements. Important factors that could cause actual results to differ
materially from Sun Gro's expectations include, among other things, failure to
complete the proposed acquisition, unexpected integration issues, fluctuations
in currency exchange rates, changes in tax laws, the impact of adverse weather
conditions on harvesting operations, an increase in freight rates, and the
impact of an increase in fuel costs. You should specifically consider these
factors, including the risks and uncertainties described in the Fund's most
recent annual information form for the year ended December 31, 2006. In
addition, the Fund's ability to make distributions to unitholders is entirely
dependent on Sun Gro's performance. Although management believes that the
forward-looking statements contained in this news release are based on
reasonable assumptions, readers cannot be assured that actual results will be
consistent with such statements. Forward-looking statements are made as of the
date of this news release and Sun Gro assumes no obligation to update or
revise them to reflect new events or circumstances.

    %SEDAR: 00017490E

For further information:

For further information: Bradley A. Wiens, Vice-President, Finance and
CFO, Sun Gro Horticulture Canada Ltd., Tel: (425) 373-3603, Email:, Website:

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