Groupworks Financial Corp.
TSX VENTURE : GWC

Groupworks Financial Corp.

May 04, 2010 16:05 ET

Groupworks Announces $10 Million Acquisition Debt Financing

TORONTO, ONTARIO--(Marketwire - May 4, 2010) - Groupworks Financial Corp. (TSX VENTURE:GWC) ("Groupworks" or the "Company") announces it has entered into an agreement with a major Canadian financial institution to provide acquisition financing in the amount of $9 million and plans to close on an operating line of credit facility in the amount of $1 million from its commercial bank (Schedule 1) for total debt financing of $10 million.

Under the terms of the acquisition facility, each individual acquisition and associated drawdown shall be approved based on the terms of the acquisition as detailed in the agreement between the parties. The term of each acquisition loan shall be up to 7 years and each drawdown shall include an interest only period of 3 to 5 years. The interest rate pricing formula would provide an interest rate of 8.7% if drawn down today. The interest rate is a fixed rate for the term of the loan for each drawdown under the facility and shall be based on the interest rate pricing formula. The facility also allows for early repayment.

"The approval and closing of this acquisition credit facility is an important milestone for Groupworks Financial Corp., facilitating the Company's plan to acquire employee benefits firms and take the Company through its next phase of growth," said Laurie Goldberg, Chairman & CEO of Groupworks. "As we look forward, our goal is to execute a number of acquisitions in accordance with our strategic plan so as to build scale, and enhance our geographic growth and client service offerings across Canada."

About Groupworks Financial Corp.

Groupworks Financial Corp. is a leading employee benefits and pension consulting firm in Canada. With a growing national footprint of ten offices in six provinces, Groupworks is bringing together the leading advisors in the industry, offering innovative and customized HR, benefit and pension solutions to its clients.

Forward-Looking Information

This news release contains "forward-looking information" within the meaning of applicable securities laws, such as information concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Use of words such as "may", "will", "expect", "believe", or other words of similar effect may indicate forward-looking information including the completion of the transaction, the impact of that transaction on our earnings and cash flow, and the anticipated benefits of the transaction. This information is not a guarantee of future performance and is subject to numerous risks and uncertainties, including those described in our publicly filed documents (which are available on SEDAR at www.sedar.com). Those risks and uncertainties include: our ability to maintain profitability and manage growth; strong competition from other advisors and changes in the current legislation could result in significant competition from the banking industry; failure of information systems and technology; dependence on key clients; seasonality of revenues and the resulting possible impairment on working capital; reliance on key professionals; additional financing may be required and may not be available under terms favourable to us; there can be no assurance that any suitable future acquisition will be available to us or that, if available, the terms of the acquisition will be favourable to us; and a change in general economic conditions. Many of these risks and uncertainties can affect our actual results and could cause our actual results to differ materially from those expressed or implied in any forward-looking information made by us or on our behalf. Given these risks and uncertainties, investors should not place undue reliance on forward looking information as a prediction of actual results. All forward-looking information in this news release is qualified by these cautionary statements. This information is made as of the date of this news release and, except as required by applicable law, we undertake no obligation to publicly update or revise any forward looking information, whether as a result of new information, future events or otherwise. Additionally, we undertake no obligation to comment on analyses, expectations or statements made by third parties in respect of the Company, its financial or operating results or its securities.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

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