West 49 Inc.

August 02, 2005 08:00 ET

West 49 Announces Signing Of Engagement Letter With Desjardins Securities Inc. To Fund Growth And Potential Acquisitions

BURLINGTON, ONTARIO--(CCNMatthews - August 2, 2005) -


West 49 Inc.(TSX:WXX)announced today that it has entered into an engagement agreement with Desjardins Securities Inc., retaining Desjardins to act as its lead advisor to assist in connection with a proposed private placement of up to approximately $20 million in equity. It is expected that the proceeds of the offering, if completed, would be used either for future acquisitions or to fund new store growth, and/or general corporate purposes.

The potential acquisitions currently under consideration consist of a Quebec-based clothing retailer (with in excess of 20 stores) and a small e-commerce business. Both of these businesses cater to the same target market as West 49 and both share complementary business strategies as well as a similar culture, and both have relationships with some of West 49's key suppliers. In each, management of the potential acquisitions would remain involved and receive, in part, equity of West 49 (subject to Toronto Stock Exchange approval). A Quebec acquisition could enable West 49 to expand into Quebec with its existing brands more readily, and could lead to the Quebec business expanding into other parts of Canada. While letters of intent have been signed, at this time there can be no assurance that these acquisitions will proceed, or as to the terms thereof. Due diligence is currently underway on both prospects. Such acquisitions, if completed, based on currently completed due diligence, are expected to be immediately accretive to earnings per share.

In addition, there can be no assurance at this time that the offering will be completed, or as to the terms thereof. The offering, which is expected would be made only pursuant to exemptions from prospectus requirements, is targeted to be completed in August or September, 2005. It remains subject to, among other things, the execution of an agency agreement, Toronto Stock Exchange approval and other usual conditions.

West 49 Inc. is a specialty retailer of apparel, footwear and accessories, with an emphasis on skateboarding, snowboarding and surfing. The Company targets "Generation Y" customers (ages 10 through 18) and offers its own West 49™ and Redstar™ labels as well as brand name products. West 49 operates 65 stores in seven provinces. West 49 also owns and operates Off the Wall™, a fashion-forward young women's clothing retailer with 10 stores. Its shares are listed on the Toronto Stock Exchange under the symbol WXX.

Forward-looking statements

Information in this news release that is not current or historical factual information may constitute forward-looking information. Implicit in this information are assumptions that, although considered reasonable by West 49 at the time of preparation, may prove to be incorrect. Readers are cautioned that actual results are subject to a number of risks and uncertainties and could differ materially from what is currently expected, including those referred to in West 49's Annual Information Form dated April 29, 2005.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States (or any other jurisdiction where it would not be allowed). The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or unless an exemption from such registration is available. Any public offering of securities to be made in the United States would, if made, be made by means of a prospectus that could be obtained from West 49 Inc. that would contain detailed information about West 49 Inc. and management and financial statements.

Contact Information

  • West 49 Inc.
    Pete Pigott
    Chief Operating Officer
    (905) 336-5454 x 261
    West 49 Inc.
    Kim Mullenger
    Manager of Financial Reporting and Investor Relations
    (905) 336-5454 x 224