May 02, 2007 08:00 ET

Eveready Income Fund Closes Acquisition of Denman

EDMONTON, ALBERTA--(CCNMatthews - May 2, 2007) - Eveready Income Fund ("Eveready" or the "Fund")(TSX:EIS.UN) announces that Denman Industrial Trailers Ltd. ("Denman") has joined the Eveready group of companies. This acquisition was previously announced on February 7, 2007. The purchase price of $74 million, for 100% of the issued and outstanding shares, was paid through cash consideration with the final purchase price subject to certain adjustments.

Founded in 1995, Denman has grown to become the premier supplier of workforce accommodation to the oil and gas industry. Denman pioneered the concept of high quality, hotel-like housing for energy-sector employees with the introduction of the Oilsands Industrial Lodge in 1997, which has since become the benchmark for employee housing requirements. Denman operates six industrial lodges in the Alberta oil sands region, giving the company significant market presence.

"Denman's significant operations in the Alberta oil sands region bring us a step closer to our goal of being the number one service provider to the oil sands region," comments Rod Marlin, Eveready's President and Chief Executive Officer. "The energy industry is dependent on quality housing for its employees and with present demands exceeding supply, coupled with significant oil sands development planned and in progress, we see tremendous growth potential for Denman in this area."

"This transaction gives Denman the opportunity to continue its expansion into the Alberta oil sands," added Len Addison, president of Denman. "I look forward to continuing my relationship with Denman's customers as a member of the Eveready team."

Eveready estimates Denman will initially generate EBITDA of approximately $18.0 to $20.0 million on an annual basis. However, given Denman's planned capital expansion and the significant anticipated growing demand for quality lodging facilities in the Alberta oil sands, Denman's EBITDA could improve significantly in the near future. This acquisition is accretive to Eveready.

Eveready is also pleased to announce that Len Addison has been appointed Vice President of Operations of Eveready. As Vice President of Operations, Mr. Addison will continue to guide Denman through its expansion in the Alberta oil sands.

Eveready is a growth oriented income fund that provides industrial and oilfield services; health, safety and environmental services; and oilfield equipment rental services to the energy, resource, and manufacturing sectors. The Units of Eveready trade on the Toronto Stock Exchange under the trading symbol "EIS.UN".

EBITDA is a supplemental earnings measure that does not have any standardized meaning prescribed by Canadian GAAP and may not be comparable to EBITDA calculated by other funds or entities. EBITDA is a useful supplemental measure as it provides an indication of the financial results generated by Eveready's principal business activities prior to consideration of how these activities are financed or how the results are taxed in various jurisdictions and before non-cash amortization expense. EBITDA is defined as earnings before interest, taxes, depreciation and amortization.

This press release contains forward-looking statements subject to various risk factors and uncertainties, which may cause the actual results, performances or achievements of Eveready to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, fluctuations in the market for oil and gas and related products and services, political and economic conditions, the demand for services provided by Eveready, industry competition and Eveready's ability to attract and retain both customers and key personnel.

Contact Information

  • Eveready Income Fund
    Rod Marlin
    President & CEO
    (780) 451-6075
    (780) 451-2142 (FAX)
    Eveready Income Fund
    John M. Stevens
    Senior Vice President & CFO
    (780) 451-6075
    (780) 451-2142 (FAX)
    Website: www.evereadyincomefund.com