Drive Products Income Fund
TSX : DPI.UN

Drive Products Income Fund

January 28, 2008 14:59 ET

Drive Products Income Fund Acquires U.S. Based Distributor

TORONTO, ONTARIO--(Marketwire - Jan. 28, 2008) - Drive Products Income Fund (TSX:DPI.UN) today announced that it has entered into an agreement to purchase all of the outstanding shares of a U.S. based distributor for cash consideration of $1.9 million U.S. This acquisition has an expected closing date of February 11, 2008. The company is a driveline distribution and assembly firm located in South Carolina, USA. The operating activities of the company will be integrated into those of the Fund commencing upon closing of the purchase.

The company specializes in cardan and constant velocity driveline applications for military and off highway construction. "The products offered by this company fit in nicely with our product portfolio. This acquisition will provide us with a platform to grow our business in the U.S. to original equipment manufacturers and the U.S. military", said Greg Edmonds, Chief Executive Officer. "The company is currently supplying parts for the U.S. military's Mine Resistant Ambush Protected vehicle program ("MRAP"). Together we will be able to leverage each others experience and reputation to grow that aspect of our business. The purchase will also secure the distribution rights to two key product lines, reducing our purchasing costs and improving our gross margins. The U.S. presence will allow us to access a large network of driveline facilities in the U.S. and expand our distribution business".

Based on unaudited financial information and management's due diligence, the company achieved revenues and normalized EBITDA of $5.8 million and $0.6 million respectively for the fiscal year ended December 2007 (all figures in U.S. dollars). The purchase price represented an estimated 3.2 times fiscal 2007 normalized EBITDA. Management expects the acquisition to be accretive to the Fund's 2008 financial results.

About Drive Products Income Fund

Founded in 1983, Drive Products is a Canadian leader in the design and installation of systems solutions that transform a conventional new truck chassis into a specialized vehicle that meets a customer's technical and performance requirements. To achieve this, Drive Products offers a wide variety of products such as power take-offs, hydraulic pumps, motors and coolers, winches, cables and controls, drivelines, blowers and compressors, hoses and fittings, custom consoles, snowplows, spreaders and electronic spreader controls, from leading international manufacturers, in many instances as the sole distributor in Canada. The Fund was created on August 25, 2006 and the Fund's units trade on the Toronto Stock Exchange under the symbol DPI.UN. Drive Products Income Fund holds a 54.5% indirect interest in Drive Products. The remaining 45.5% is indirectly held by senior management.

Forward-Looking Statements

This press release contains forward-looking statements relating to expected future events and financial and operating results of the Fund. These statements involve known and unknown risks and uncertainties. Actual results may differ materially from those anticipated by such forward-looking statements for a variety of reasons, including without limitation, market and general economic conditions and the risks and uncertainties detailed from time to time in the Fund's continuous disclosure documents filed with the Canadian securities regulatory authorities. The Fund disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.

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