Sun Gro to add new bogs in Quebec, enhance geographic diversity of peat resources

    Trading Symbol: The Toronto Stock Exchange - GRO.UN

    VANCOUVER, June 5 /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 entered into an agreement to acquire
Quebec-based peat moss producer Tourbiere Omer Belanger Inc. for $3.9 million.
    The transaction, which is expected to close at the end of June 2007, will
strengthen Sun Gro's long-term peat supply in eastern Canada while increasing
the geographic diversity of its peat harvest resources. The acquisition
includes 1,900 acres of largely undeveloped professional grade peat bogs,
140 acres of retail grade bogs and three adjacent production facilities, all
located in Quebec.
    "The Tourbiere Omer Belanger acquisition will give us a physical presence
in Quebec and support our ability to provide uninterrupted supply to our core
professional grower customers," said Mitch Weaver, President and CEO of Sun
Gro and a Trustee of the Fund. "With 1,615 acres of unopened professional
grade bogs and an additional 285 acres that have recently been opened, these
new holdings will provide a source of high quality peat for many years to
    The acquisition will be funded through Sun Gro's existing acquisition
line of credit and is expected to be accretive to the Fund's unitholders
beginning in 2008. With planned expansion of the harvest area over the coming
summer months, 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, this could support $4.5 million in
additional sales beginning next year, and grow from there," said Weaver.
    The transaction will be 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. The two California
transactions added four plants to Sun Gro's North America-wide production
    On completion of the Tourbiere Omer Belanger acquisition, Sun Gro will
have 14 Canadian peat and peat-mixing plants and 11 US peat and bark-mixing
plants, and 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 unit
holders 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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