Newport Partners Income Fund
TSX : NPF.UN

September 27, 2005 10:20 ET

Newport Increases Distributions to $0.95

TORONTO, ONTARIO--(CCNMatthews - Sept. 27, 2005) -

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

Fund Acquires $6.3 million of EBITDA in Four Investments

Newport Partners Income Fund (TSX:NPF.UN) announced today that, through its subsidiary entities, it has signed three definitive agreements and a letter of intent that will increase its investments in the marketing, distribution, financial services and oil and gas services industries. The total commitment for all four investments is $33.5 million that management expects will result in the addition of approximately $6.3 million to its EBITDA. At a multiple of approximately 5.3 times EBITDA, the investments are expected to be immediately accretive to Newport's current unitholders. Newport has and will draw on its credit facility to fund the investments.

As a result of the increased cash flow from these investments and the continued growth of Newport's existing operating partnerships, Newport's Board of Trustees today approved a 2.7% increase in cash distributions to $0.95 per Unit per year from the current rate of $0.925. The change is effective with the distribution to be paid on November 15, 2005 to unitholders of record at the close of business on October 31, 2005. The monthly distribution rate will rise to $0.07917 per Unit from $0.07708 paid currently.

Newport has acquired a 50% ownership interest in Kenna Group, a Mississauga-based company that provides marketing automation solutions that help blue chip companies optimize their investments in marketing, sales and service. Entrepreneurs, Glenn Chilton, Paul Quigley, and Tony Chapman, CEO of Capital C Communications LP and an operating partner of Newport, own the remaining 50% interest and are responsible for the management and direction of the business. "We partner with successful entrepreneurs and we are very excited about working with three of the most innovative leaders in the marketing industry," stated Peter Wallace, President & CEO of Newport.

"Partnering with Newport and working with Capital C creates a great opportunity for Kenna to capitalize on the revolutionary changes impacting the advertising and marketing world. With Newport's strategic advice and financial backing, we will now be able grow at a rate that otherwise would not have been possible," stated Glenn Chilton, President & CEO of Kenna Group.

"All marketers are under the gun to rationalize and prove the efficacy of their marketing efforts. Capital C and Kenna will bring an integrated solution that links all of the pieces of the marketing puzzle: from data analytics to strategy development and implementation to performance measurement," explained Tony Chapman. "We think this puts us in an ideal position to pursue a bigger piece of the expanding marketing solutions pie."

Jutan LP, Newport's operating partner in the distribution business, has entered into a definitive agreement to purchase 100% of the assets of Sonigem, a Markham-based marketer and distributor of a full range of contemporary brand-name consumer audio and video electronics since 1988. "With the acquisition of Sonigem, we have taken another step to delivering better value for our retailing customers through expanded product lines and more brand selection," explained Andy Redmond, CEO of Jutan. The acquisition of Sonigem also provides Jutan with new customers and solidifies the company's position as a leading consumer electronics distributor in Canada.

EZEE ATM, Newport's operating partner in the financial services sector, has entered into a definitive agreement to purchase 100% of the assets of Rapid Cash, an Edmonton-based operator of non-financial institution Automated Teller Machines (ATMs). The acquisition of Rapid Cash adds 42 machines to EZEE's portfolio of 2400 ATMs.

NPC Integrity Energy Services LP, Newport's operating partner in the oil and gas services business, has entered into a letter of intent to acquire a company in its industry. This acquisition is expected to close in November 2005.

The term EBITDA is a financial measure that is not a standard measure under Canadian generally accepted principles. Newport's method of calculating non-GAAP measures may differ from the methods used by other issuers. Therefore, Newport's non-GAAP measures may not be comparable to similar measures presented by other issuers. EBITDA refers to net earnings of the Company determined in accordance with generally accepted accounting principles before depreciation and amortization, net of gain or loss on disposal of capital assets, interest expense and income tax expense. Investors are cautioned that non-GAAP measures are not alternatives to measures under GAAP and should not, on their own, be construed as an indicator of Newport's performance or cash flows, a measure of liquidity or as a measure of actual return on the units. Estimates of EBITDA are based on what management of Newport consider to be reasonable assumptions based on information currently available to it, there can be no assurance that actual events or results will be consistent with these. Historical performance is not indicative of future returns.

ABOUT NEWPORT PARTNERS INCOME FUND

Newport Partners Income Fund is an unincorporated, open-ended trust created to hold through the Company's investment in Newport Partners Commercial Trust, interests in Newport Private Yield LP, a limited partnership established under the laws of the Province of Ontario. The Fund began trading on the TSX on August 8, 2005 under the symbol NPF.UN.

ABOUT NEWPORT

Newport is the financial partner to successful entrepreneurs who have proven track records and operate businesses that have a history of profitability and consistent cash flows. Through its ownership interests, Newport is engaged in a range of businesses in diverse industries. Newport's business strategy allows the entrepreneur to make the operating decisions for the business, while strategic and capital allocation decisions are made jointly by Newport and the entrepreneur. Entrepreneurs are attracted to Newport by the opportunity to diversify their personal wealth while still maintaining operational control of their business and benefiting from access to lower cost capital. Newport's managing principals are 15 individuals who have more than 350 years experience in investment management, corporate finance and operations.

Contact Information

  • Newport Partners Income Fund
    Kelly Willis
    416-867-8590