Strongco Inc.

Strongco Inc.

March 15, 2005 19:24 ET

Strongco Board Approves Plan to Convert into Income Fund




MARCH 15, 2005 - 19:24 ET

Strongco Board Approves Plan to Convert into Income

MISSISSAUGA, ONTARIO--(CCNMatthews - March 15, 2005) - Strongco Inc.
(TSX:SQP) today announced that its Board of Directors has approved a
plan of arrangement (the "Plan") pursuant to which Strongco will be
converted into a new publicly traded income fund ("Strongco Income
Fund") that will carry on the existing Strongco business. Accordingly,
the Board of Directors is recommending to all Strongco shareholders that
they approve the Plan at Strongco's Annual and Special meeting (the
"Meeting") to be held on or about April 28, 2005. A Management
Information Circular (the "Circular") detailing the elements of the Plan
will be mailed to Strongco shareholders on or about April 1, 2005. In
addition to shareholder approval, the Plan is subject to a number of
conditions, including receipt of regulatory, court and other necessary

Under the terms of the Plan, each Strongco shareholder will receive one
unit of Strongco Income Fund in exchange for each share of Strongco. In
addition, option-holders will be entitled to exercise all of their
options until the effective date of the Plan when such options are
terminated. Existing Strongco management will continue to manage the
Strongco business after its conversion into Strongco Income Fund.

The initial distribution policy of Strongco Income Fund will be to
distribute monthly to its unitholders an amount equal to $0.15 per unit,
representing $1.80 on an annualized basis. The distribution level of the
Fund will be reviewed at each Trustee Meeting. If the conversion is
approved by the Strongco shareholders at the Meeting, Strongco
anticipates its first monthly distribution will be paid to holders of
record on May 31st, 2005 and paid on June 20th, 2005. The first
distribution will be $0.15 per unit.

The Board of Directors engaged BMO Nesbitt Burns Inc. as its financial
advisor in connection with the proposed transaction. BMO Nesbitt Burns
Inc. has provided a fairness opinion in respect of the Plan. The
fairness opinion provides that, in BMO Nesbitt Burns Inc.'s opinion, as
of March 15th, 2005, the consideration to be received by Strongco
shareholders upon completion of the Plan is fair, from a financial point
of view, to such shareholders.

Mr. Larry Pirnak, President, commented, "The Board of Directors of
Strongco concluded that shareholder value could be substantially
enhanced by converting Strongco into an income fund. In recommending the
Plan, the board believes that it has the following advantages: (1) It is
anticipated that the combined value of distributions plus the market
value of the units will be greater than the combined value of dividends
that could otherwise be paid on the Strongco shares plus the market
value of the Strongco shares, and that the Fund will have greater access
to capital to fund growth; and (2) It is anticipated that the conversion
of Strongco into an income fund will attract new investors and provide
in the aggregate a more active and liquid market for the units than
exists for the Strongco shares."

Strongco will host a conference call at 3:30 p.m. on Wednesday March
16th, 2005 to further discuss the conversion. To participate in the
conference call, dial 800.381.9619 or 416.641.6652, reservation number
is 21234700. A taped version of the call will be available until March
30th, 2005. Dial 800.558.5253 and enter the reservation number.

Strongco is a full-line equipment sales and service company. Its shares
are listed on the Toronto Stock Exchange and its website can be accessed


Contact Information

    Strongco Inc.
    Len Phillips
    Vice President Administration and Corporate Secretary
    (905) 565-3840
    (905) 565-1907 (FAX)