CanWel Building Materials Group Ltd.

CanWel Building Materials Group Ltd.

December 17, 2009 08:55 ET

CanWel Building Materials Income Fund Completes $57.5 Million Private Placement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 17, 2009) -


CanWel Building Materials Income Fund (the "Fund") (TSX:CWX.UN) is pleased to announce that it has completed its previously announced private placement of 15,131,700 subscription receipts ("Subscription Receipts") at a price of $3.80 per Subscription Receipt for gross proceeds of approximately $57.5 million (the "Private Placement") pursuant to a bought deal underwritten by GMP Securities L.P. ("GMP"). Prior to closing of the Private Placement, GMP fully exercised its option to increase the size of the Private Placement from $50 million to $57.5 million.

Amar Doman, Chairman of Fund, remarked "I am pleased that the Private Placement, including the over-allotment option, was fully subscribed. With this financing in place, we remain on track to complete CanWel's conversion into a corporation and the Broadleaf acquisition in early 2010."

Subject to the satisfaction of certain conditions, including unitholder approval of the Private Placement, each Subscription Receipt will entitle the holder to receive one unit of the Fund, without further payment or action on the part of the holder, immediately prior to the completion of the Fund's previously announced conversion into a dividend paying corporation (the "Conversion") and acquisition of Broadleaf Logistics Company (the "Acquisition"). If the Private Placement is not approved by unitholders or if the Acquisition and Conversion are not completed by April 30, 2010, the Subscription Receipts will be automatically redeemed by the Fund at a price of $3.80 per Subscription Receipt plus accrued interest. 

The net proceeds of the Private Placement will be used to pay the cash portion of the purchase price for the Acquisition and expenses associated with the Acquisition, the Private Placement and the Conversion, to repay certain indebtedness and for general corporate purposes.

The Fund has received an interim order from the Supreme Court of British Columbia authorizing it to proceed with a special meeting of its voting securities to approve the Acquisition, the Conversion and the Private Placement. The special meeting has been called for January 15, 2010. The record date for Unitholders entitled to receive notice of and attend the special meeting was December 14, 2009. The Fund expects to mail an information circular concerning the matters to be considered at the special meeting shortly. The information circular will also be available on SEDAR at after it has been mailed.

About CanWel

The Fund trades on the Toronto Stock Exchange under the symbol CWX.UN and is one of Canada's largest national distributors in the building materials and related products sector, operating 16 distribution centres across Canada. The Fund distributes a wide range of hardware, building materials, lumber, and renovation products. Further information can be found in the disclosure documents filed by the Fund with the securities regulatory authorities, available at

Cautionary Statements

Certain statements in this press release, including in particular statements regarding the proposed Acquisition, Conversion and Private Placement, may constitute "forward-looking" statements. When used in this press release, such statements use words, including but not limited to, "may", "will", "expect", "believe", "plan", "intend", "anticipate", "future" and other similar terminology. These forward-looking statements reflect the current expectations of the Fund's management regarding future events and operating performance, but involve known and unknown risks, uncertainties and other factors which may cause the outcome of the Acquisition, the Private Placement and/or the Conversion or the actual results, performance or achievements of the Fund, Broadleaf and/or the combined company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual events could differ materially from those projected herein and depend on a number of factors. These factors would include, but are not limited to, dependence on market and economic conditions, sales and margin risk, competition, information system risks, availability of supply of products, risks associated with the introduction of new product lines, product design risk, environmental risks, volatility of commodity prices, inventory risks, customer and vendor risks, acquisition and integration risks, availability of credit, credit risks, interest rate risks, regulatory risks and employee retention risks. There can be no assurance that the Acquisition, the Private Placement or the Conversion will be completed on the terms described in this press release or at all. In addition, there are numerous risks associated with an investment in units of the Fund, which are also further described in the "Risk Factors" section of our annual information form dated March 31, 2009 and our other public filings on SEDAR. These forward-looking statements speak only as of the date of this press release. Except as required by applicable securities laws, the Fund does not undertake, and specifically disclaims, any obligation to update or revise any forward looking information, whether as a result of new information, future developments or otherwise, except as required by applicable law.

The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registrations requirements of such Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction.

Contact Information

  • CanWel Building Materials Income Fund
    Amar Doman
    Chairman of the Board
    (604) 608-6600
    Ali Mahdavi
    Investor Relations
    416-962-3300 or +1(866) 430-6247