Stephenson's Rental Services Income Fund

Stephenson's Rental Services Income Fund

May 24, 2006 17:43 ET

Stephenson's Rental Services Closes Acquisition of A1 Equipment Rental

MISSISSAUGA, ONTARIO--(CCNMatthews - May 24, 2006) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES

Stephenson's Rental Services Income Fund (TSX:RNT.UN) announced today that its operating subsidiary, Stephenson's Rental Services Inc., has completed the previously announced acquisition of A1 Equipment Rental Ltd. The final purchase price of $43.819 million was financed with available credit facilities.

A1 is the second largest independent equipment rental company in the Greater Toronto Area and is a leader in the rental market serving professional contractors. A1 has been in business for over 30 years and operates out of three locations in Toronto, Durham and Oakville. Revenue of $16.630 million and adjusted EBITDA of $7.475 million were reported for the year ended December 31, 2005.

"We are very excited to have completed the acquisition of A1. Given the complementary nature of its assets and the strong strategic fit with Stephenson's, we expect significant benefits to Stephenson's and its unitholders," commented William Swisher, President and CEO of Stephenson's. "On a pro forma basis, this acquisition is expected to immediately deliver strong accretion to distributable cash per unit, prior to synergies".

"We have an integration team established, and will move quickly to combine the A-1 operations with the existing Stephenson's business," said James McInnis, Stephenson's Vice President and CFO. "In the near term, we expect to realize rationalization savings at A1, given the overlap with Stephenson's existing infrastructure."

"The addition of A1's modern rental fleet as we head into the busy summer construction period positions Stephenson's well to capture additional revenue from new and existing customers," added Mr. Swisher. "With Stephenson's established hub and spoke distribution infrastructure we expect to improve the utilization of A1's fleet, providing for incremental revenue opportunities."

Concluded Mr. Swisher, "With this acquisition, we have further broadened our product offering and solidified our leading market position in Toronto and the surrounding area, the largest equipment rental market in Canada."

About Stephenson's:

Stephenson's is the leading general tool and equipment rental company in Toronto and the surrounding areas. Over the last 50 years, the Company has grown from a single location into one of the top ten equipment rental businesses in Canada.

Through its 19 branches, Stephenson's provides rental equipment and sells consumables to a diverse base of over 30,000 customers, divided into three primary categories: (i) residential new construction; (ii) non-residential new construction; and (iii) renovations.

Further information can be found on the Fund's web site at www.stephensons.ca and in the disclosure documents filed by with securities regulatory authorities available at www.sedar.com

Certain statements in this press release may constitute "forward-looking" statements that involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Fund to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this press release, such statements use such words as "may," "will," "expect," "anticipate," "project," "believe," "plan" and other similar terminology. The risks and uncertainties are detailed from time to time in reports filed by Stephenson's Rental Services Income Fund with the securities regulatory authorities in all of the provinces and territories of Canada to which recipients of this press release are referred for additional information concerning the Fund, its prospects and the risks and uncertainties relating to the Fund and its prospects. New risk factors may arise from time to time and it is not possible for management to predict all of those risk factors or the extent to which any factor or combination of factors may cause actual results, performance and achievements of the Fund to be materially different from those contained in forward-looking statements. The forward-looking information contained in this press release is current only as of the date of this press release. There should not be an expectation that such information will in all circumstances be updated, supplemented or revised whether as a result of new information, changing circumstances, future events or otherwise.

Contact Information

  • Stephenson's Rental Services Income Fund
    William D. Swisher
    Chief Executive Officer
    (905) 507-3650