IBI Income Fund
TSX : IBG.UN

IBI Income Fund

August 23, 2005 12:37 ET

IBI Income Fund Announces Acquisition And Integration Of A Leading Architectural Practice In High Rise Residential Condominiums

TORONTO, ONTARIO--(CCNMatthews - Aug. 23, 2005) - IBI Income Fund (the "Fund") (TSX:IBG.UN) announced today the signing of formal documentation between IBI Group and IBI (Architects in British Columbia) and the architectural partnership of Hancock, Bruckner, Eng+ Wright ("HBEW"), providing for the integration of HBEW within IBI Group. The firms expect that the closing of the transaction will occur on August 31, 2005.

HBEW is a leading architectural practice in the design of high-density residential condominium environments of the highest quality. HBEW is based in Vancouver, British Columbia, an area that is known for the high quality of design of such residential living. HBEW has an outstanding portfolio of completed work to its credit in the lower British Columbia mainland. As well, HBEW has recently received mandates from its expanding developer clientele for projects in Arizona, California, Minnesota and Oregon.

Jim Hancock, Senior Partner of HBEW, commented that "the integration of our practice within IBI Group will enable us to continue to extend our reach and design projects throughout North America and beyond, while maintaining quality control and benefiting from the network of IBI offices and its capable professionals in the various areas in which we seek to practice."

Martin Bruckner, Senior Partner of HBEW commented that " integrating with IBI Group will provide the additional professional resources to ensure that as HBEW's scope of practice grows within IBI Group it will continue to meet professional obligations, time deadlines and the demands of its expanding clientele."

David Thom, Managing Director of the Urban Land and Building Practices of IBI Group commented that adding "HBEW's experience in high rise condominium design to IBI's current work in residential community design accross Canada, California and other sunbelt states of the United States is a perfect complement to IBI's current work in urban design, residential community design, landscape design, transportation and transit oriented development, traffic and civil engineering, as well as the architectural design of grade related low and medium density housing."

Phil Beinhaker, Chairman Director and CEO of IBI Group noted that "this acquisition and integration of the HBEW practice is a model example of IBI moving forward the program of growth which was the objective of the Fund's initial public offering (IPO) of last year. We anticipate that the integration of HBEW will be synergistic and enrich the existing practice of IBI. The integration of Jim Hancock, Martin Bruckner, Alan Woolf, and Jeff Christenson, along with HBEW's total complement of 47 professional staff, and their outstanding reputation will enhance IBI Group's service to its clients."

The acquisition will be initially funded by a loan by IBI Group Management Partnership (IBIGMP) to IBI Group. This loan will bear interest at the same rate as the operating line of credit that IBI Group has with its bank lender, being prime plus 0.75%. The loan from IBIGMP will be subordinated to the Fund's indebtedness to its bank lender and will be unsecured. It will be repayable in advance without penalty at the option of IBI Group. No fees are payable by IBI Group in respect of the loan.

The interest rate payable is currently less than half the yield payable on the units of the Fund. The acquisition of HBEW is anticipated to be immediately accretive to the Fund by generating additional distributable cash of approximately $900,000 per annum, equivalent to approximately 8% of the distributable cash anticipated in the prospectus for the Fund's IPO.

The Fund's current plan is that following the successful completion of a number of additional acquisitions, it will complete a public offering of additional units, the proceeds of which will be used in part to repay the indebtedness incurred in connection with the acquisition of HBEW.

The loan to IBI Group from IBIGMP is a related party transaction as defined in Ontario Securities Commission Rule 61-501 - Insider Bids, Issuer Bids, Going Private Transactions and Related Party Transactions (the "Rule"). It is anticipated that the loan transaction will close at the same time as the acquisition of HBEW on August 31, 2005. As a result, the material change report to be filed by the Fund in respect of the acquisition and the loan is anticipated to be filed less than 21 days before the expected date of the closing of the transaction. In accordance with the requirements of the Rule, the Fund is required to explain in this press release why the shorter period is reasonable or necessary in the circumstances. The shorter period is necessary in the circumstances as the parties have agreed that the acquisition of HBEW by IBI Group will close on August 31, 2005 and the proceeds from the loan are required in order for IBI Group to be able to complete the acquisition.

ABOUT IBI INCOME FUND

The Fund is a TSX listed income trust, which pays monthly distributions and trades under the symbol "IBG.UN".

The Fund holds an indirect 50% interest in IBI Group, a partnership which provides professional services, including planning, design, implementation, analysis of operations and other consulting services in relation to four main areas of development, being urban land, building facilities, transportation networks and systems technology. The remaining 50% of IBI Group is owned by IBIGMP.

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 actual results, performance or achievements of the Fund 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 "may", "will", "expect", "believe", "anticipate", "project", "plan" and other similar terminology. The risks and uncertainties are detailed from time to time in reports filed by the Fund with the securities regulatory authorities in all of the provinces and territories of Canada to which recipients of this press release are referred for additional information concerning the Fund, its prospects and the risks and uncertainties relating to the Fund and its prospects. New risk factors may arise from time to time and it is not possible for management to predict all of those risk factors or the extent to which any factor or combination of factors may cause actual results, performance and achievements of the Fund to be materially different form those contained in forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

The forward-looking information contained in this press release is current only as of the date of the press release. There should not be an expectation that such information will in all circumstances be updated, supplemented or revised whether as a result of new information, changing circumstances, future event or otherwise.

Contact Information

  • IBI Income Fund
    Philip H. Beinhaker
    230 Richmond Street West,
    Toronto, ON M5V 1V6
    (416) 596-1930