IBI Income Fund
TSX : IBG.UN

IBI Income Fund

September 06, 2005 16:05 ET

IBI Income Fund Announces the Closing of the Acquisition and Integration of Two Firms;

TORONTO, ONTARIO--(CCNMatthews - Sept. 6, 2005) -

Providing Immediate Expected Accretive Gains of Approximately 9% to the Fund's Distributable Cash and Strategic Growth Prospects

IBI Income Fund (the "Fund") (TSX:IBG.UN) announced today the closing on September 1, 2005 of the previously announced acquisition by IBI Group and IBI (Architects in British Columbia) of the architectural partnership of Hancock, Bruckner, Eng+ Wright ("HBEW"), providing for the integration of HBEW within IBI Group, as well as the closing on August 31, 2005 of the acquisition by IBI Group and IBI Group Architects of the architectural firm of Grey- Noble & Grey- Noble, Architects, ("GN").

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.

GN is a firm specializing in educational facilities throughout Southern Ontario as well as internationally.

Phil Beinhaker, Chairman Director and CEO of IBI Group noted that "the acquisition and integration of the practices of HBEW and GN are model examples 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 and GN will be synergistic and enrich the existing practice of IBI. The integration of the leadership of these firms along with the total complement of over 55 professional staff, and their outstanding reputation, will enhance IBI Group's service to its clients."

Transaction Highlights

- Adds complementary architectural capabilities in high rise residential condominium design and in educational facilities.

- The acquisitions of HBEW and GN are expected to be immediately accretive to the Fund's distributable cash by approximately 9%.

Acquisition Financing

The acquisition of HBEW was funded by a loan by IBI Group Management Partnership (IBIGMP) to IBI Group. This loan bears 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 is subordinated to the Fund's indebtedness to its bank lender and is unsecured. It is 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 GN was funded out of IBI Group's operating line with its bank lender.

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 acquisitions.

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.

NON-GAAP MEASURE

Distributable cash does not have a standardized meaning prescribed by generally accepted accounting principles, but is a measure generally used by Canadian open-ended income funds as an indicator of financial performance. The Fund describes distributable cash as net earnings before interest, depreciation, amortization, income taxes and after interest paid, capital expenditures, taxes paid and contributions to any reserves that the trustees of the Fund deemed to be reasonable and necessary for the operation of the Fund.

The Fund's method of calculating distributable cash may differ from similar computations as reported by other similar entities and, accordingly, may not be comparable to distributable cash as reported by such entities. Management of the Fund believes that distributable cash is a useful supplemental measure that may assist readers in assessing their return on an investment in units.

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, Ontario M5V 1V6
    (416) 596-1930