COLABOR INCOME FUND
TSX : CLB.UN

COLABOR INCOME FUND

March 03, 2008 16:05 ET

Colabor to Acquire Bruce Edmeades Foodservice Distribution

BOUCHERVILLE, QUEBEC--(Marketwire - March 3, 2008) - Colabor Income Fund (TSX:CLB.UN) ("Colabor" or the "Fund") announced today that Colabor Limited Partnership has entered into an asset purchase agreement to acquire substantially all of the assets of Bruce Edmeades Co. ("Bruce Edmeades" or the "Company"), one of Canada's leading distributors to the foodservice industry with annual revenues exceeding C$230 million for the year ended December 28, 2007, from Martin-Brower of Canada Co. ("Martin-Brower") (the "Acquisition"). The purchase price is expected to be approximately $10 million in cash. Colabor will also assume certain liabilities of Bruce Edmeades incurred in the normal course of business prior to closing.

"The addition of Bruce Edmeades to Colabor's already strong presence in Ontario through the Summit division represents a natural progression in our plan to consolidate the Eastern Canadian foodservice distribution market," said Gilles C. Lachance, President and CEO of Colabor. "Bruce Edmeades adds significant volume to our system, due in part to the addition of several prominent clients. With this Acquisition, Colabor's annual sales are expected to surpass the $1 billion mark, evidence to Colabor's strengthening position as a market leader in the Canadian food distribution industry."

Founded in 1968, Bruce Edmeades currently stocks approximately 9,000 products and operates mainly out of a HACCP certified warehouse in Cambridge, Ontario. The Company distributes to customers primarily in Southern Ontario, but also across Canada servicing several large and well-known customers, including Wendy's, Mr. Sub and Zehrs and other customers operating in the restaurant, healthcare, industrial, education and other industries.

Peter C. Hobbes, President of Martin-Brower, stated, "Like Colabor, Bruce Edmeades has established a long-standing reputation for providing superior service and high-quality products to its customers. This transaction will allow the Company to build on this reputation and enhance it through an expanded product offering and increased distribution capability."

Immediately following the closing of the Acquisition, Bruce Edmeades will be integrated within Colabor's Summit division. This integration plan is expected to benefit Bruce Edmeades' profitability through a lower overall purchasing cost, the optimization of the combined operations and the leveraging of the Summit division's infrastructure. Colabor expects to bring Bruce Edmeades' operating margins near those achieved by the Summit division within twelve to eighteen months following the closing of the Acquisition, thus creating significant value for Colabor's unitholders.

Commenting on the Acquisition, Jack Battersby, President of the Summit division of Colabor, stated, "Summit has known and respected Bruce Edmeades as a competitor for many years. Our similar cultures and affinity for client service should result in a seamless integration."

Subject to customary closing conditions for a transaction of this nature, the Acquisition is expected to close during March 2008 and will be financed using Colabor's existing credit facilities with syndicate of lenders led by National Bank Financial Inc.

About Colabor Income Fund

Colabor is a wholesaler and distributor of food and non-food products serving the retail (grocery stores, convenience stores, etc.) and food-service (cafeterias, restaurants, hotels, restaurant chains, etc.) markets. Colabor is one of the largest wholesalers in Canada and the largest in Quebec, with net sales of $838 million for the year ended December 31, 2007.

Forward-looking Statements

This News Release may contain forward-looking statements reflecting the opinions or present expectations of Colabor Income Fund or Colabor Limited Partnership concerning their performance as well as their respective business activities and future events. These statements are subject to a number of risks, uncertainties and assumptions. Actual results or events may differ.

Further information can be found in the disclosure documents filed by Colabor Income Fund with the securities regulatory authorities, available at www.sedar.com.

Contact Information

  • Colabor Income Fund
    Mr. Gilles C. Lachance
    President and Chief Executive Officer
    450-449-0026 ext. 265
    or
    Colabor Income Fund
    Mr. Michel Loignon, CA
    Vice-President Finance & Administration
    450-449-0026 ext. 235