March 02, 2010 07:30 ET

TerraVest Income Fund Sells Stylus Business

VEGREVILLE, ALBERTA--(Marketwire - March 2, 2010) - TerraVest Income Fund (the "Fund") (TSX:TI.UN) is pleased to announce that it has sold the assets of its Stylus furniture business ("Stylus") for $6.5 million, subject to customary working capital adjustments, to Stylus Sofas Inc., a corporation wholly-owned by Rick Ripoli, Dennis Ripoli and Derek Barichello, the current senior executives of Stylus and members of the family that founded the business. The assets that were sold comprise all of the assets and liabilities used in the Stylus business, which includes the design, manufacture and marketing of made-to-order upholstered furniture and the import and marketing of leather furniture. $6 million of the purchase price was paid at closing with the balance to be paid on or before August 31, 2010.

As part of its ongoing management of its portfolio businesses, management has reviewed its options for maximizing its return from its investment in Stylus and has considered the prospects for continuing to own and operate Stylus and other alternatives. Management has determined that disposing of its investment in Stylus is the Fund's best opportunity to maximize its return on this investment, particularly in the current difficult environment for the North American furniture industry, and is, therefore, in the best interests of the Fund and its investors. The sale of Stylus will also allow management to focus on the Fund's other portfolio businesses.

Proceeds from the sale of Stylus will be applied to reduce borrowings under the Fund's operating line which was recently used to finance Diamond Energy Services Limited Partnership's acquisition of four service rigs in Saskatchewan. As part of the Fund's amended credit agreement terms, the available borrowing capacity under the operating line will be reduced by 80% of the total proceeds received for Stylus.

About the TerraVest Income Fund

The Fund is an unincorporated, open-ended, limited purpose, mutual fund trust established under the laws of the Province of Alberta pursuant to a declaration of trust dated May 3, 2004. The Fund was established for the purpose of investing in a diversified group of income producing businesses located primarily in Canada.

The Fund has invested in six portfolio businesses. After the disposition of Stylus, the Fund's five portfolio businesses will be:

- RJV is one of the largest providers of wellhead processing equipment for the natural gas industry in western Canada.

- Diamond is a market leader in providing well servicing to the oil and natural gas sector in south-western Saskatchewan, with a growing presence in Alberta.

- Don Park is one of Canada's largest manufacturers and suppliers of heating, ventilation and air conditioning (HVAC) products.

- Beco is one of the largest Canadian designers, manufacturers and importers of home textile products.

- Ezee-On manufactures heavy-duty equipment for large acreage grain farms and livestock operations.

Caution Regarding Forward-Looking Statements

All statements, other than statements of historical fact, contained in this press release are forward-looking statements, including, without limitation, statements regarding the business strategy, planned disposition of Stylus, use of proceeds thereof and proposed acquisitions. Although Management believes that the expectations represented in such forward looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.

By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that the forward-looking statements will not prove to be accurate. We caution readers of this press release not to place undue reliance on our forward-looking statements because a number of factors could cause actual future results, conditions, actions or events to differ materially from the expectations or intentions expressed in the forward-looking statements. Assumptions and analysis about the performance of the Fund, as a whole, and the Fund's portfolio businesses and the markets in which they compete are considered in setting the business plan for the Fund, in setting financial targets for the Fund and in making related forward-looking statements. The key assumption in respect of the planned disposition of the Stylus is that conditions of closing will be satisfied and the closing proceeds as planned. In respect of the portfolio businesses, key assumptions include those relating to the demand for products and services of the portfolio businesses and in respect of the Canadian and other markets in which the Fund's businesses are active (and in particular, the Canadian oil and natural gas industry in western Canada and the markets for household materials and household goods). Should any of these factors or assumptions vary, actual results may differ materially from the forward-looking statements.

The information set forth in the MD&A of the Fund for the year ended December 31, 2008 and the annual information form of the Fund dated March 24, 2009, identifies additional factors that could affect the operating results and performance of the Fund and its portfolio businesses. We caution that these discussions of factors are not exhaustive and that, when relying on forward-looking statements to make decisions with respect to the Fund, investors and others should carefully consider the factors discussed, as well as other uncertainties and potential events.

Contact Information