Futuremed Healthcare Income Fund
TSX : FMD.UN

Futuremed Healthcare Income Fund

June 09, 2008 16:15 ET

Futuremed to Acquire Dismed Expands Distribution Network into Quebec

- Expected to be 8 - 10% accretive to distributable cash on a pro forma basis - Represents a leading distribution platform in Quebec - Provides a springboard into Quebec and the Eastern Canadian markets, creating a national platform for Futuremed - Potential for significant synergies as a result of increased scale and cross-buying - Expands Futuremed's team by over 60 skilled employees with strong customer relationships in Quebec - Adds an 80,000 sq. ft distribution centre located in Montreal, Quebec

TORONTO, ONTARIO--(Marketwire - June 9, 2008) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities described herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification or registration under applicable securities laws of any such jurisdiction. The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933 (the "Securities Act") and may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act.

Futuremed Healthcare Income Fund ("Futuremed") (TSX:FMD.UN) and Dismed Inc. ("Dismed") announced today that they have entered into a definitive share purchase agreement dated June 9, 2008 whereby Futuremed has agreed to acquire Dismed, a private corporation, for a purchase price of $24.25 million (before any working capital adjustments). Dismed is a leading supplier of medical supplies, instruments and equipment throughout the province of Quebec. The shareholders of Dismed include CDP Investissements Inc., Solidarity Fund QFL, Champlain Financial Corporation and management.

The acquisition provides Futuremed with a leading distribution platform in the Quebec marketplace, which Futuremed can leverage to service the Eastern Canadian market. The acquisition provides Futuremed 2,500 customers and a highly skilled workforce, totalling 60 employees, including a dedicated sales and marketing team with strong relationships in Quebec. In addition, the acquisition provides Futuremed an operating facility in excess of 80,000 square feet.

Raymond Stone, President and CEO of Futuremed said: "The acquisition of Dismed represents an important strategic step for Futuremed in the province of Quebec. Dismed is a leading platform with deep customer relationships and a reputation for service excellence. Consistent with Futuremed's goal of having enhanced market share in all regions of Canada, a strong Quebec presence is a pivotal piece to our business strategy. We believe that the acquisition of Dismed will continue to enhance unitholder value into the future."

Francine Pomerleau, President and Chief Executive Officer of Dismed, commented: "We are very excited about joining the Futuremed team. As part of Futuremed, we are now able to go to market in Quebec with the enhanced product offering and the presence of being a national supplier. Futuremed's commitment to service excellence and quality will be well received by customers. Going forward, we are excited by the new opportunities to grow our business in the Quebec marketplace. "

In order to finance part of the acquisition, Futuremed has entered into an agreement to sell, to a syndicate of underwriters led by CIBC World Markets Inc. and National Bank Financial Inc. $ 17,062,500 of subscription receipts exchangeable for trust units at a price of $ 9.10 per subscription receipt, on a bought deal basis. A preliminary short form prospectus will be filed shortly with the Canadian securities regulatory authorities, and the offering is expected to close on or about June 30, 2008, subject to regulatory approvals.

National Bank Financial Inc. acted as financial advisor and Goodmans LLP is acting as legal advisor to Futuremed in connection with the acquisition.

Futuremed Health Care Income Fund

Futuremed Healthcare Income Fund, through its operating entities, is Canada's leading value-added distributor of consumable nursing home supplies and specialized furniture and equipment to the growing long-term care facilities sector. Futuremed's Trust Units trade on the Toronto Stock Exchange under the symbol FMD.UN. More information can be found at www.futuremedfund.com.

Dismed Inc

Founded in 1979 and based in Montreal, Dismed is a supplier of medical supplies, instruments and equipment throughout the province of Quebec. For additional information please visit: www.dismed.com.

Special Note Regarding Forward-Looking Statements

Certain statements in this press release may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Futuremed to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this press release, such statements use such words as "expect", "believe", "may", "will", and other similar terms. These statements reflect current expectations regarding future events and operating performance and speak only as of the date of this press release.

By their very nature, forward-looking statements involve significant risk and uncertainties, both general and specific, and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including but not limited to: the ability to integrate Dismed's operations into Futuremed, potential undisclosed liabilities associated with the acquisition of Dismed, and relationships with customers and suppliers. For example, the acquisition may not be as accretive as expected or at all.

Futuremed cautions that the foregoing list of important factors that may affect future results is not exhaustive. When reviewing Futuremed's forward-looking statements, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Additional information about factors that may cause actual results to differ materially from expectations, and about material factors or assumptions applied in making forward-looking statements, may be found in the "Risk Factors" section of Futuremed's annual information form and in Futuremed's management's discussion and analysis of financial condition and results of operations for the year ended December 31, 2007 and elsewhere in filings with Canadian securities regulators. Futuremed does not undertake to update any forward-looking statements, except as required by applicable Canadian securities law; such statements speak only as of the date made.

Non-GAAP Measures

Distributable cash is not a recognized measure under Generally Accepted Accounting Principles ("GAAP"). Management believes that distributable cash is a useful supplemental measure that may assist investors in assessing the financial performance and the cash generated by Futuremed that is available to unitholders for distribution. Distributable cash is based on cash flows from operating activities, the measure under GAAP reported in Futuremed's financial statements. Futuremed's method of calculating distributable cash may differ from other issuers' methods and accordingly, it may not be comparable to measures used by other issuers.

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