Binscarth PVC Ventures Inc.

March 28, 2005 11:47 ET

Binscarth PVC Ventures Inc. Announces Qualifying Transaction


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: BINSCARTH PVC VENTURES INC.

TSX VENTURE SYMBOL: BPV.P

MARCH 28, 2005 - 11:47 ET

Binscarth PVC Ventures Inc. Announces Qualifying
Transaction

TORONTO, ONTARIO--(CCNMatthews - March 28, 2005) - (NOT FOR
DISSEMINATION IN THE UNITED STATES OF AMERICA)

Binscarth PVC Ventures Inc. ("Binscarth") (TSX VENTURE:BPV.P) is pleased
to announce details concerning its proposed Qualifying Transaction.

Highlights of the Proposed Qualifying Transaction

- The Company: Binscarth proposes to effect a Qualifying Transaction
with Dove Corp. ("DoveCorp"), an industry leader in the
retail/commercial dry cleaning and laundry industry in Canada.

- Business Rationale: The reason for both parties entering into this
Qualifying Transaction is that DoveCorp anticipates being able to
generate significant growth by way of acquisition, as a result of recent
federal environmental legislation governing how dry cleaning operations
deal with toxic waste fluids that are used in the dry cleaning process.
DoveCorp believes that this legislation puts a significant financial
onus on the dry cleaning industry, which is very fragmented and
characterized by many, small, independent operations, and that this will
result in opportunities for larger operations in the industry, such as
DoveCorp, to consolidate smaller operations so that the burden of
compliance with the new environmental legislation can be sustained.
DoveCorp believes that being a public company will significantly enhance
its ability to achieve its growth targets.

- Valuation: The transaction values DoveCorp at $12 million, subject to
a ratchet that requires that a certain percentage of shares received by
current DoveCorp shareholders be forfeited to treasury and cancelled to
the extent that DoveCorp fails to generate annualized revenues, for the
months of September, October and November, 2005, of at least $10.75
million. (See below: "About the Proposed Qualifying Transaction" for
further details)

About DoveCorp

DoveCorp is a leader in Canada's dry cleaning and laundry industry, with
one of its divisions having over 10 years of recognition as "Best Dry
Cleaning and Laundry in Canada" by various fashion and industry
magazines. With scalable and proven management, operational and quality
control systems and the only ISO 9001 dry cleaning registration in the
industry, DoveCorp believes that it will be an industry consolidator.

The Industry

The dry cleaning and laundry industry provides a basic, staple service,
and is very large. DoveCorp believes that the retail and commercial dry
cleaning and laundry industry in North America generates approximately
$24 billion in revenues annually; according to Statistics Canada, the
size of the Canadian market was approximately $2.0 billion in 2002. The
commercial laundry business is also characterized by a high level of
recurring revenues (multi-year contracts are typical); the dry cleaning
business is characterized by a high level of repeat business, as the
need for the service is ongoing and customers tend to return to their
regular service-provider. However, it is an industry which is highly
fragmented and which is going through transition.

DoveCorp believes that there are approximately 3,300 dry cleaning
operations in Canada, and 1,000 in Ontario alone. Although there are a
few "mini-chains", the industry is comprised, in great part, of "mom &
pop" operations. Small size can preclude access to capital and
sophisticated management systems, as well as the ability to deploy
successful marketing and branding strategies.

Moreover, DoveCorp believes that regulations recently introduced by the
federal Ministry of the Environment, aimed at containing the potential
impact of the use of toxic chemicals in the dry cleaning industry
(specifically, perchloroethylene or "PERC") will require existing dry
cleaning operations using PERC in their processes to make a significant
investment in equipment upgrade, generally in the range of $100,000 for
the average dry cleaning operation. For such an average dry cleaning
operation (according to Environment Canada, over 75% of dry cleaning
operations generate revenues less than $200,000 annually), this will
prove to be a significant burden. These regulations come into full force
and effect in August, 2005.

As a result of these circumstances, DoveCorp believes that a number of
retail operations and processing plants will become available for
purchase creating consolidation opportunities. To DoveCorp's knowledge,
there is not currently any other industry consolidator.

The Company

In 2003, DoveCorp embarked on a strategy to consolidate the Toronto dry
cleaning and commercial laundry industry. Backed by a recognized private
equity fund, Integrated Partners, a division of Integrated Asset
Management Corp. (TSXV: IAM), it started by bringing together three
companies and relocating them in a large (42,000 square feet), modern
facility in northwest Toronto. As a result, DoveCorp is Toronto's only
"one-stop" shop offering dry cleaning, laundry, linen and uniform rental
and dust control mats to the hospitality, institutional and retail
industries. It is also the only ISO 9001 certified dry cleaning and
commercial laundry operation in the industry. DoveCorp currently has 31
retail dry-cleaning locations across GTA (of which 30 are franchised)
feeding volume through its processing plant, which has scalable
processing capacity to meet its anticipated volume increases.

The next phase of DoveCorp's strategy will consist of acquiring
competitors with their own central processing plants and 10 or more
retail outlets, converting small independent single store operations
with no processing capability, and selling franchises in the greater
Toronto area.

Growth in revenues is expected to come, aside from acquisitions, through
normal expansion in market share. Growth in net income is expected to
come through economies of scale and efficiencies.

Management's goal is to replicate the Toronto operation in other major
centres in Canada and, selectively, in the U.S.A. The intention is to
create a recognizable brand in an industry that currently has no brand
leader.

About the Proposed Qualifying Transaction

Binscarth has entered into an arm's length letter agreement dated March
24, 2005 with DoveCorp whereby Binscarth and DoveCorp have agreed to
complete a business combination between DoveCorp and Binscarth (the
"Business Combination"). The Business Combination is expected to
constitute a Qualifying Transaction of Binscarth as defined in Policy
2.4 of the TSX Venture Exchange Inc. ("TSXV") Corporate Finance Manual.

The Business Combination will proceed by way of share exchange on the
basis that DoveCorp's shareholders will receive 40,000,000 Binscarth
common shares with a deemed value of $0.30. After completion of the
Business Combination, Binscarth will have 49,137,000 common shares
outstanding.

In addition to TSXV-imposed escrow of Binscarth shares issued to
Dovecorp shareholders in connection with the Business Combination, of
the 40,000,000 Binscarth shares issued to DoveCorp's shareholders,
6,666,667 shares will be placed into escrow. In the event that DoveCorp
fails to meet a revenue target, for the months of September, October and
November, 2005, of $10.75 million on an annualized basis, certain of
these escrowed shares will be forfeited to treasury and cancelled on a
basis pro rata to annualized revenues achieved for these months. Should
annualized revenues fail to exceed $8.0 million, all 6,666,667 shares
will be forfeited to treasury and cancelled.

Following completion of the transaction, Binscarth will carry on
DoveCorp's business under DoveCorp's management. It is intended that
Binscarth will change its corporate name to "Dove Inc." or a similar
name following approval at a shareholders' meeting called for that
purpose and that a new stock trading symbol will be applied for at that
time as well. DoveCorp management also intends to consolidate the
outstanding shares of Binscarth on the basis of one new share for every
five (5) existing shares following completion of the transaction and
subject to receipt of shareholder approval.

Management and Board of Directors

Management of the issuer upon completion of the transaction will include:

Sam Mizrahi - President

Mr. Mizrahi has had a successful career as an entrepreneur focusing his
energies on identifying opportunities in a variety of industries and
then personally managing their start-ups, corporate/financial
structuring and growth. His specific skill sets include integrating new
technology and management systems as well as assembling and managing
cohesive teams in the financial, distribution and retail market segments
from corporate inception. Mr. Mizrahi founded DoveCorp in 1992 in Los
Angeles, California, developed and implemented the first scalable
management and processing systems in the industry and led the company to
compounded sales growth of over 25% since inception and single store
sales of over $2 million.

Norman Hertzman - V.P. Operations

As an entrepreneur and executive, Norman Hertzman has focused on the
implementation and integration of a variety of business and management
systems over the last 10 years. Mr. Hertzman has been in the
dry-cleaning industry for over a decade. Serving as Dove's
Vice-President of Operations and an expert on quality control since the
company's inception, Mr. Hertzman is certified as an Environmental
Dry-cleaning Operator and specializes in high-end plant operations as
well as the development and implementation of enhanced quality control
systems.

Following completion of the transaction, the Board of Directors will
consist of 6 directors of which 5 have been determined as follows:

Mr. Sam Mizrahi

See profile above.

Doug Harris. B.Sc., M.B.A., C.A., C.B.V.

Vice-President, Integrated Partners

Prior to joining Integrated Partners in 2001, Mr. Harris was Managing
Director of Koloshuk Farrugia Securities Inc. From 1996 to 1999, he was
Associate Director, Mergers & Acquisitions, Yorkton Securities and from
1994 to 1996 he was Senior Consultant, Business Valuations Group, Arthur
Andersen. Mr. Harris holds a B.Sc. from the University of Guelph and an
M.B.A. from the University of Toronto. Mr. Harris is also a Chartered
Accountant and Chartered Business Valuator. Mr. Harris is a director of
Systech Retail Systems Corp. and Omega Insurance Holdings Inc.

George J. Engman, B.Sc., M.B.A.

President and Chief Executive Officer, Integrated Partners

Mr. Engman formed and headed the merchant banking portfolio o the
Ontario Teachers' Pension Plan, was co-founder and co-head of Royal Bank
Equity Partners Limited and the founding portfolio manager of private
equities for the Ontario Municipal Employee Retirement System. Mr.
Engman has served on several board including Onex Corporation, Maple
Leaf Foods Inc., Sun Media Corporation, Maple Leaf Gardens, Commcorp
Financial Services Inc. and Integrated Asset Management Corp.

Clare Copeland

Chairman, Toronto Hydro Corporation and CEO, Fallsview Niagara Casino

Mr. Copeland has served as President and Chief Executive Officer of
Peoples Jewellers Corporation and has held the most senior post in
several private sector companies. He has served as Chair of the Sun
Media Corporation and Chair of Ontario Place. Mr. Copeland has also
served on numerous other boards, chairing committees of such boards as
Scotts Restaurant, Danier Leather, the Retail Council of Canada and the
Molson Indy Foundation.

Nelson Smith

Current President & Chief Executive Officer, Binscarth PVC Ventures Inc.

Mr. Smith is a graduate engineer and chartered accountant with over 25
years' experience in the investment industry. He has held positions in
securities regulation (staff member, Ontario Securities Commission) and
merchant banking as well as with member firms of the Investment Dealers
Association of Canada. Most notably, Mr. Smith was a co-founder of
Canada's first technology investment bank at Yorkton Securities (now
Orion Securities), and held the position of Managing Director and Head
of Investment Banking at Yorkton for a number of years. He has also been
a member of the boards of a number of public companies.

Financial Information

Based on audited consolidated financial statements for the year ended
September 30, 2004, the year of executing the consolidation and moving
three plant operations into the new centralized 42,000 square feet
facility, DoveCorp had revenue of approximately $6.3 million, EBITDA of
approximately $0.12 million, and net loss of approximately $2.0 Million.

Other Information About the Qualifying Transaction

Paradigm Capital Inc., subject to satisfactory due diligence, has agreed
to act as sponsor in connection with the Business Combination. An
agreement to act as sponsor should not be construed as any assurance
with respect to the merits of the Business Combination or the likelihood
of completion.

The completion of the Business Combination is subject to the approval of
the TSXV and all other necessary regulatory approval. It is also subject
to additional conditions precedent, including shareholder approval of
DoveCorp under applicable corporate law, satisfactory completion of due
diligence reviews by the parties, board of directors approval of
Binscarth and DoveCorp, the entering into of employment agreements and
non-competition agreements with certain key personnel of DoveCorp and
certain other conditions.

In the event that the Business Combination is completed, subject to TSXV
approval and compliance with Binscarth's stock option plan, it is
anticipated that options will be granted to certain of Binscarth's new
directors and senior officer on closing of the Business Combination.

The Business Combination will be an arm's length transaction as the
directors and officers of Binscarth currently have no interest in
DoveCorp.

Other News

Binscarth also announces that Ruby Osten, Barry Reiter, Anthony
Griffiths and Peter Snucins will resign as directors of Binscarth,
effective on the closing date of the Business Combination. They will
remain involved in the resulting issuer in a consultative capacity.
Binscarth would like to thank them for their dedicated service to date.

As noted above, completion of the Business Combination is subject to a
number of conditions, including, but not limited to, TSXV acceptance.
The Business Combination cannot close until the required approvals have
been obtained. There can be no assurance that the Business Combination
will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Filing
Statement of Binscarth to be prepared in connection with the Business
Combination, any information released or received with respect to the
Business Combination may not be accurate or complete and should not be
relied upon. Trading in the securities of Binscarth should be considered
to be highly speculative.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Binscarth PVC Ventures Inc.
    Nelson Smith
    President and CEO of Binscarth
    (416) 565-7518
    or
    DoveCorp
    Sam Mizrahi
    President & CEO of DoveCorp
    (416) 782-8788 x 23
    The TSX Venture Exchange Inc. has in no way passed upon the merits of
    the Business Combination and has neither approved nor disapproved the
    contents of this release.