October 07, 2010 08:30 ET

TerraVest Announces Sale of Don Park

VEGREVILLE, ALBERTA--(Marketwire - Oct. 7, 2010) - TerraVest Income Fund (the "Fund") (TSX:TI.UN), announced today that its portfolio business, Don Park Limited Partnership ("Don Park") has reached a definitive agreement to sell to RONA Inc. the assets and operations of its Canadian business that manufactures and distributes HVAC and fire products for the residential, commercial, industrial and institutional markets. The transaction is expected to close before December 31, 2010 and is subject to approval from the Competition Bureau of Canada.

Total proceeds from the sale are expected to be $25.9 million in cash, subject to a hold-back and final adjustments. The Fund is required to apply a minimum of 80% of the proceeds from the sale to reduce the amount outstanding under the Fund's credit facility.

The Fund will retain its 80% interest in Don Park USA, a local supplier of heating, ventilation and air condition (HVAC) products in the southeastern United States. Don Park USA comprises a minor and discrete portion of the Fund's combined Don Park business and, accordingly, the sale is not expected to affect the Don Park USA operations.

This transaction results from the Fund's previously disclosed process to assess the prospects for, and values of, each of its portfolio businesses. The Fund will continue to evaluate its investments in the remaining portfolio businesses in order to determine the best use of its capital, with alternatives, in each case, including continuing to operate the portfolio business, disposition and repayment of debt and/or making special distributions, and capital reinvestment.

About TerraVest Income Fund

The Fund has investments in five businesses:

RJV is one of the largest providers of wellhead processing equipment for the natural gas industry in western Canada. 

Diamond is a market leader in providing well servicing to the oil and natural gas sector in south western Saskatchewan. 

Ezee On manufactures heavy duty equipment for large acreage grain farms and livestock operations.

Beco is one of the largest Canadian designers and importers of home textile products. 

Don Park USA is a local supplier of heating, ventilation and air condition (HVAC) products in the southeastern United States. 

Caution Regarding Forward-Looking Statements

The public communications of TerraVest Income Fund (the "Fund") often include written or oral forward-looking statements. Statements of this type are included in this news release. Forward-looking statements may involve, but are not limited to, comments with respect to the sale of the Canadian Don Park business, our strategies or future actions, and our targets or expectations for our financial performance and condition. All statements other than statements of historical fact contained in this news release are forward-looking statements. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. 

By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, and, accordingly, there is significant risk that the forward-looking statements will not prove to be accurate. Expectations as to closing the sale of the Canadian Don Park business and the expected proceeds from the sale assume certain adjustments will be made and that conditions to close will be met. Should any of these factors or assumptions vary, actual results may differ materially from the forward-looking statements. 

The information set forth under "Risk Factors" in the annual information form of the Fund dated March 23, 2010 and under "Financial Instruments" in the MD&A for the year ended December 31, 2010, identifies risk factors that could affect the operating results and performance of the Fund and its portfolio businesses.

The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.

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