Park Lawn Corporation
TSX VENTURE : PLC

Park Lawn Corporation

December 15, 2011 17:31 ET

Park Lawn Corporation Announces Agreement to Acquire Services Memorables Harmonia Inc.

TORONTO, ONTARIO--(Marketwire - Dec. 15, 2011) - Park Lawn Corporation ("Park Lawn") (TSX VENTURE:PLC) announces that it has signed a Share Purchase Agreement to acquire all the shares of Services Mémorables Harmonia Inc. ("Harmonia"). Harmonia currently operates in the Quebec City area and provides funeral and cemetery services, and cremation and cremation memorial products. Harmonia is a private company incorporated in Quebec and is owned by 31 shareholders. Harmonia has been operating since 2007. The business of Harmonia will be carried on through the Harmonia Division of Park Lawn.

Current shareholders of Harmonia will receive rights which are convertible to Park Lawn common shares. The value of the rights is based on a valuation formula derived from the calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA") for the Harmonia Division of Park Lawn in future fiscal years.

Current noteholders of Harmonia are owed $1,227,858. These noteholders have agreed to receive non-interest bearing Promissory Notes from Park Lawn equal to the face value of the current notes. 20% of the Promissory Notes will be converted to Park Lawn common shares at such time as the Harmonia Division achieves an EBITDA of $450,000 in a single year, or a cumulative EBITDA of $1,000,000. The remaining 80% of the face value of the Promissory Notes will be converted to Park Lawn common shares in the year following the achievement of an EBITDA of $800,000 in a single year or cumulative EBITDA of $2,000,000 in the Harmonia Division. The Promissory Notes will be converted to Park Lawn common shares at 120% of the face value of the Promissory Notes.

The right of conversion to Park Lawn common shares for both the noteholders and the shareholders of Harmonia will be at the market price at the time of conversion. It is anticipated that such conversions will result in common shares being issued which represent less than 5% of the equity of Park Lawn. A complete copy of the Share Purchase Agreement is available at www.sedar.com.

Benefits of the Transaction

  • Harmonia is well positioned to expand its business with the growth and greater acceptance of cremation in Quebec.
  • Harmonia requires greater financial support and the industry experience that can be provided by Park Lawn. Park Lawn anticipates that it will invest up to $1.5 million in the Harmonia operation.
  • Harmonia's growth and development is a long-term opportunity that will establish a leading position in the Quebec market.
  • The transaction will be tax efficient. Park Lawn will be able to apply Harmonia's tax losses against Park Lawn's taxable income.

Réal Parent, Chairman of Harmonia, commented "The shareholders of Harmonia are pleased to join our enterprise with Park Lawn. We see a great opportunity to be part of a larger public company that has been successful in the cemetery, cremation and related services."

Frank Mills, C.E.O of Park Lawn, stated "Harmonia is a young company in Quebec City, but it has successfully established itself in its offerings of funeral and cremation services and cremation memorial products. We are pleased to join with Harmonia and be able to provide the resources that will allow Harmonia to expand its services in the future. We are confident that the addition of Harmonia will be accretive to the income of Park Lawn and add substantial value to our shareholders."

About Park Lawn

Park Lawn Corporation owns and operates six cemeteries in the Greater Toronto Area and holds an interest in Bloorpark Developments Inc. Its common shares are listed on the TSX Venture Exchange.

About Harmonia

Harmonia currently operates in the Quebec City area and provides funeral and cemetery services, and cremation and cremation memorial products. Harmonia has been operating since 2007.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Park Lawn Corporation
    Frank Mills
    Chief Executive Officer
    416-231-1462