VANCOUVER, Aug. 3 /CNW/ - WesternOne Equity Income Fund ("WesternOne Equity") (TSX: WEQ.UN, WEQ.DB and WEQ.DB.B) today announced that it has signed a letter of intent (the "LOI") for the purchase of the assets of an engineered scaffold business that specializes in the rental, sales, installation and servicing of scaffold equipment (the "Business"). The Business is independently owned, and operates from a base in Calgary with operations covering Northern and Southern Alberta. The LOI contemplates WesternOne Equity paying at closing a purchase price of $6.0 million, plus $1.0 million upon completion of the first 12 months of operations post acquisition, provided a pre-determined earnings level is achieved. The purchase price is subject to post-closing adjustments. The transaction is expected to be completed, subject to due diligence and other customary conditions, by September 2010.
WesternOne Equity will finance this transaction using a combination of existing cash, debt and issuance of fund units to existing shareholders of the Business.
This transaction would be immediately accretive to WesternOne Equity's unitholders. The Business is estimated by its management to have earned approximately $1.8 million EBITDA for the trailing 12 months ended May 31, 2010, based on unaudited financial information. WesternOne Equity's management also expects the product and service offering of the Business to be further leveraged at WesternOne Equity's 14 existing operating locations in BC and Alberta.
Further details will be announced upon the entering into of a formal acquisition agreement and after the completion of the transaction.
"We are excited about this transaction, in particular the opportunity to strategically expand our product offering to include engineered scaffold products and related services," stated Mr. Geoff Shorten, COO of WesternOne Equity. "This transaction would allow us to enhance our market share in Western Canada by offering our customers a more complete range of equipment rental services."
Forward Looking Information
Certain statements in this press release may constitute "forward looking" information that involves known and unknown risks, uncertainties and other factors, and it may cause actual results, performance or achievements or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Forward-looking information is identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", and similar terms and phrases, including references to assumptions. Such information may involve but is not limited to comments with respect to strategies, expectations, planned operations or future actions.
Forward-looking information included in this press release include, but is not limited to, statements with respect to the outlook of the transaction currently contemplated in the LOI, its projected impact on WesternOne Equity's business and management's assessment of future plans and operations. Forward-looking information reflects current expectations of management regarding future events and operating performance as of the date of this press release. Such information involves significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking information, and a description of these factors can be found under "Risks and Uncertainties" in WesternOne Equity's Annual Information Form dated March 31, 2010, which is available on SEDAR (www.sedar.com).
Although the forward-looking information contained in this press release is based upon what the WesternOne Equity's management believes to be reasonable assumptions, WesternOne Equity cannot assure investors that actual results will be consistent with such information. Forward-looking information reflects management's current beliefs and is based on information currently available to WesternOne Equity. Such information reflects current assumptions regarding future events and operating performance including, without limitation, stability in the economy in Western Canada, interest rates and the equipment rental and sales and fuel wholesale markets in which WesternOne Equity operates, successful completion of the investigation, acquisition and integration of new business opportunities, and speaks only as of the date of this press release. The forward-looking information is made as of the date of this press release and WesternOne Equity assumes no obligation to update or revise such information to reflect new events or circumstances, except as may be required by applicable law.
References in this press release to "EBITDA" are to earnings before interest, income taxes, depreciation, amortization, accretion, gains/losses on financial derivatives relating to changes in the fair market value of the fixed interest rate swap, foreign exchange gains/losses, and write-down of fleet assets, intangible assets and goodwill. EBITDA is a measure used by many investors to compare issuers on the basis of ability to generate cash flow from operations. EBITDA is not an earnings measure recognized by Canadian generally acceptable accounting principles ("GAAP"), does not have standardized meanings prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. WesternOne Equity's management believes that EBITDA is an important supplemental measure in evaluating WesternOne Equity's performance and in determining whether to invest in its units.
Readers of this information are cautioned that EBITDA should not be construed as an alternative to net income or loss determined in accordance with GAAP as indicators of WesternOne Equity's performance or to cash flows from operating, investing and financing activities as measures of WesternOne's liquidity and cash flows. WesternOne Equity's method of calculating EBITDA may differ from the methods used by other issuers and, accordingly, WesternOne Equity's EBITDA may not be comparable to similar measures presented by other issuers.
About WesternOne Equity
WesternOne Equity seeks to acquire equipment, fuel distribution and infrastructure related businesses located primarily in the Western Canadian provinces of British Columbia, Alberta and Saskatchewan, in order to generate stable and growing distributions to its unitholders as well as to achieve overall capital appreciation.
Additional information about WesternOne Equity is available at www.weq.ca or www.sedar.com.
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS RELEASE.
SOURCE WesternOne Inc.
For further information: For further information: Carlos Yam, Chief Financial Officer, WesternOne Equity Income Fund, Suite 910, 925 West Georgia Street, Vancouver, BC, V6C 3L2, Phone: (604) 678-4042, E-mail: firstname.lastname@example.org, Website: www.weq.ca