Savaria Corporation

Savaria Corporation

July 08, 2005 09:58 ET

Savaria Acquires Concord Elevator Inc., Creating the Second Largest Manufacturer of Elevator & Accessibility Products in North America

LAVAL, QUEBEC--(CCNMatthews - July 8, 2005) - Savaria Corporation (TSX:SIS), one of North America's leading accessibility companies that facilitates and ensures mobility for the physically challenged, announces the conclusion of a binding agreement related to the acquisition of Concord Elevator Inc. ("Concord"), a Brampton, Ontario based company that designs, manufactures and distributes elevators and vertical platform lifts around the world. This agreement follows a letter of intent signed on April 25, 2005, and the completion of a satisfactory due diligence performed by the Company during the last two months. This acquisition, by far Savaria's largest ever, more than doubles its sales and should contribute to improving its earnings per share as of the current fiscal year.

The acquisition of Concord alters Savaria's scope while consolidating its strengths:

- Products: Addition of an excellent line of residential and
commercial elevators that perfectly complement Savaria's
product line.
- Distribution Network: With Concord's 250 sales outlets
worldwide, Savaria's combined distribution network will reach
close to 450 different sales outlets in North America alone.
- Purchases: The combined purchasing power of Concord and Savaria
will stimulate significant vendor interest favouring better
service, quality and pricing.
- Product Development: The combined product development will
optimize manufacturing efficiencies, resulting in greater returns
on invested projects, and offer expanded new product lines.
- Income Taxes: Concord's over $15 million loss carry-forward
will provide a meaningful tax shelter for future cash flows.
- Facility: Concord's under-utilized manufacturing facility will
be better utilized by supporting various Savaria products,
manufactured parts and future space needs.

"Concord's president, Don Campopiano, along with Nelson Tremblay, Rob DeRooy, Rob Murphy and Trevor Moore all stay on board to help Savaria become the North American leader in the accessibility and residential elevator industry," stated Marcel Bourassa, Chairman, President and CEO of Savaria. "This acquisition definitely allows us to make an important leap forward under reasonable financial conditions."

Savaria acquires all of Concord's issued and outstanding shares for $7.5 million, which amount could increase up to $9.6 million based on pre-tax earnings recorded by Concord over the next three years. The purchase price is paid by the issuance of 5,000,000 common shares of Savaria at a price of $1.50 per share. The performance premium, if payable, will be paid through a combination of cash and a maximum of 750,000 common shares of Savaria. The shares issued in connection with this transaction will be subject to resale restrictions for a minimum of two years, with one-third being freed up in July 2007, 2008 and 2009 respectively.

Closing of the acquisition of Concord is subject to the receipt of all requisite third party and regulatory approvals and the execution of definitive transaction documents.

"The transaction will greatly benefit Savaria's and Concord's employees and shareholders by making use of the combined knowledge of products, marketing and distribution. We are confident that this consolidation will be most successful" said Mr. Jules Tremblay, Chairman of Concord's Board of Directors.

"The acquisition of Concord doubles Savaria's size, while only diluting its shareholders' equity by some 20%. Moreover, this transaction does not affect the strong financial position of the Company, which holds more than $7 million in cash after the acquisition of the assets of Van-Action," added Jean-Marie Bourassa, Chief Financial Officer of Savaria.

"Savaria is expected to generate annualized sales of more than $65 million, benefit from important synergies from many levels of operations and enjoy a meaningful tax shelter. This transaction truly marks the beginning of a new era of growth and profitability for the Company," concluded Marcel Bourassa.

Forward-Looking Statements

Certain statements in this press release may be forward-looking. Forward-looking statements involve known and unknown risks, uncertainties or other factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Savaria Corporation ( is one of Canada's leading accessibility companies. Savaria designs, manufactures and distributes eight products, meeting the needs of people with mobility challenges, including stairlifts, vertical and inclined platform lifts and elevators for residential use. Savaria's products are sold through a network of over 300 retailers and exceeded $22 million for the year ended March 31, 2005. Some 61% of Savaria's sales come from sales to customers in the United States, 37% from Canada and 2% from Europe. Savaria employs close to 150 people.

Concord Elevator Inc., ( designs, manufactures and distributes elevators for residential and commercial use and vertical platform lifts. Established 32 years ago, Concord generates sales of $27 million, operates out of a 170,000-square-foot facility in Brampton, Ontario, and employs over 150 people. Concord's sales, 60% of which come from the United States, rely on a network of over 250 dealers throughout the United States, Canada, Mexico, the Caribbean, South America, Europe, Russia, Asia, Africa, the Middle East and Australia.

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