Coast Wholesale Appliances Income Fund

Coast Wholesale Appliances Income Fund

October 31, 2008 08:00 ET

Coast Wholesale Appliances Enters Ontario Market

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 31, 2008) - Coast Wholesale Appliances Income Fund (the Fund) (TSX:CWA.UN) today announced that its indirect subsidiary, Coast Wholesale Appliances LP (Coast), has reached a tentative agreement to purchase the assets and business of independent Ontario appliance dealer Morley's Appliance Centre. This transaction is expected to be completed, subject to due diligence and other customary conditions, by the end of the year. It will be financed by Coast's existing acquisition term facility and is expected to be immediately accretive to the Fund's EBITDA and distributable cash.

Morley's operates one location situated in the Greater Toronto Area in the Township of Vaughan. Founded in 1954, the business has a well-established customer base across the developer, builder, designer and retail markets, and currently generates annual sales revenues of approximately $11 million.

This transaction is in keeping with one of the Fund's key strategic objectives - expanding the business of Coast into Eastern Canada. Coast has operated in Western Canada since 1978 and is a leading independent supplier of major household appliances to developers and builders of multi-family and single-family housing, and to retail customers. Coast currently has 15 stores and four warehouse distribution centres located across the four western provinces.

"We have been actively seeking and assessing acquisition opportunities in Eastern Canada for some time and Morley's provides the right fit with our business model and corporate culture," stated Blain Lawson, Chief Executive Officer of Coast. "In addition to providing us with a well-established foothold in the largest market in Canada, this well-located dealership will allow us to generate incremental sales revenue growth by capitalizing on Coast's buying power and the strong operating synergies that exist between the two businesses. We look forward to building on Morley's excellent reputation and customer base in Ontario." Lawson added that Coast intends to retain all staff and management of Morley's.

Fund profile

Coast Wholesale Appliances Income Fund was created to acquire and hold a 65% indirect interest in Coast Wholesale Appliances LP and its results are entirely dependent upon Coast's operating results. The remaining 35% interest has been retained by the previous ownership. Since its inception, the Fund has paid 40 consecutive monthly distributions to unitholders.

Forward-looking statements

This news release may contain forward-looking statements relating to expected future events and financial and operating results of Coast that involve risks and uncertainties. The actual results may differ materially from management expectations as projected in such forward-looking statements for a variety of reasons. These include market and general economic conditions, the result of due diligence inquiries and negotiation of binding acquisition documents, and the risks and uncertainties detailed from time to time in Coast's continuous disclosure materials filed with Canadian securities regulatory authorities, including the second quarter 2008 and year-end Management's Discussion and Analyses filed at SEDAR ( These forward-looking statements are based on assumptions that management considered reasonable at the time they were prepared. Due to the potential impact of these factors, Coast disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.

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