October 1, 2013
Boyd Group Income Fund Announces a Bought Deal Financing for Gross Proceeds of C$55,200,000
Not for distribution to U.S. newswire services or for dissemination in the United States
Winnipeg, Manitoba - October 1, 2013 - Boyd Group Income Fund (TSX: BYD.UN) (the “Fund,” “Boyd” or the “Boyd Group”) today announced that it has entered into an agreement with National Bank Financial Inc. on behalf of a syndicate of underwriters consisting of National Bank Financial Inc. and Cormark Securities Inc., acting as co-leads and joint bookrunners, and including CIBC World Markets Inc., Laurentian Bank Securities Inc., Scotia Capital Inc. and Octagon Capital Corp. (collectively, the “Underwriters”), pursuant to which the Fund will issue from treasury, and the Underwriters shall purchase on a “bought-deal” basis, 2,000,000 trust units (the “Units”). The Units will be offered to the public by way of a short form prospectus at a price of C$27.60 per Unit, for gross proceeds to the Fund of C$55,200,000 (the “Offering”).
The Fund intends to use the net proceeds of the Offering principally to repay unamortized prepaid rebates (unearned income) previously received under paint supply arrangements and used as funding for acquisitions and start-ups, as well as for general corporate purposes. The Fund would be repaying the prepaid rebates as part of a restructuring of its paint supply arrangements from prepaid rebates to back-end purchase discounts.
“Prepaid rebates from our paint supply partner have been an important component of our growth strategy to date. However, given our current size, purchasing scale and access to capital, combined with changing paint market conditions, we have now assessed that moving to higher, market-driven, back-end purchase discounts will be to our advantage and very accretive to our unitholders,” said Brock Bulbuck, President and Chief Executive Officer of the Boyd Group. “In addition, repayment with equity proceeds will further strengthen our balance sheet and position us extremely well to continue to execute on our growth strategy.”
The Fund has also granted to the underwriters an over-allotment option to purchase up to 300,000 additional Units, representing 15% of the size of the offering. The over-allotment option may be exercised until 30 days following the closing of the offering.
The Fund expects to file a preliminary short form prospectus relating to the Offering on October 7, 2013 and closing of the Offering is expected to occur on or about October 22, 2013. The Offering is subject to normal regulatory approvals, including approval of the Toronto Stock Exchange. The Units will be offered in each of the provinces of Canada, excluding Quebec, and if offered in the United States, by way of private placement in accordance with applicable registration exemptions.
This news release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the Unites States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.
About The Boyd Group Inc.
The Boyd Group Income Fund (http://www.boydgroup.com) is an unincorporated, open-ended mutual fund trust created for the purposes of acquiring and holding certain investments, including a majority interest in The Boyd Group Inc. and its subsidiaries. In terms of locations, The Boyd Group Inc. is the largest operator of non-franchised collision repair centres in North America and one of the largest in terms of sales. The Company operates locations in five Canadian provinces under the trade name Boyd Autobody & Glass (http://www.boydautobody.com), as well as in 15 U.S. states under the trade names Gerber Collision & Glass (http://www.gerbercollision.com), Autocrafters Collision and Hansen Collision and Glass. The Company is also a major retail auto glass operator in the U.S. with locations across 28 U.S. states under the trade names Gerber Collision & Glass, Glass America, Auto Glass Services, Auto Glass Authority and S&L Glass. The Company also operates Gerber National Glass Services, an auto glass repair and replacement referral business with approximately 3,000 affiliated service providers throughout the United States.
About The Boyd Group Income Fund
The Boyd Group Income Fund is an unincorporated, open-ended mutual fund trust created for the purposes of acquiring and holding certain investments, including a majority interest in The Boyd Group Inc. and its subsidiaries. The Units trade on the Toronto Stock Exchange (TSX) under the symbol BYD.UN.
For further information, please contact:
President & CEO
Tel: (204) 895-1244
Tel: (416) 815-0700 or toll free 1-800-385-5451 (ext. 258)
Chief Financial Officer
Tel: (204) 895-1244
Caution concerning forward-looking statements
Statements made in this press release, other than those concerning historical financial information, may be forward-looking and therefore subject to various risks and uncertainties. Some forward-looking statements may be identified by words like “may”, “will”, “forecast”, “anticipate”, “estimate”, “expect”, “intend”, or “continue” or the negative thereof or similar variations. Forward looking statements in this press release include the likelihood of the restructuring of the paint supply arrangements and the Offering being completed on the stated terms or at all and the accretive nature of the stated market-driven, back-end paint purchase discounts to the Fund’s earnings and cash flows.
Readers are cautioned not to place undue reliance on such statements, as actual results may differ materially from those expressed or implied in such statements. Factors that could cause results to vary include, but are not limited to: dependence upon The Boyd Group Inc. and its Subsidiaries; cash distributions not guaranteed; inability to successfully integrate acquisitions; economic downturn; operational performance; rapid growth; loss of key customers; brand management and reputation; insurance risk; quality of corporate governance; tax position risk; risk of litigation; acquisition risk; credit & refinancing risks; dependence on key personnel; employee relations; decline in number of insurance claims; market environment change; reliance on technology; weather conditions; expansion into new markets; fluctuations in operating results and seasonality; increased government regulation and tax risk; execution on new strategies; operating hazards; energy costs; U.S. health care costs and workers compensation claims; low capture rates; key supplier relationships; capital expenditures; competition; potential undisclosed liabilities associated with acquisitions; foreign currency risk; ability to successfully integrate acquisitions and realize synergies; regulatory risks; margin pressure; acquisition and start-up growth and ongoing access to capital; environmental, health and safety risk; interest rates; and the Fund’s success in anticipating and managing the foregoing risks.
We caution that the foregoing list of factors is not exhaustive and that when reviewing our forward-looking statements, investors and others should refer to the “Risk Factors” section of the Fund’s Annual Information Form, the “Risks and Uncertainties” and other sections of our Management’s Discussion and Analysis of Operating Results and Financial Position and our other periodic filings with Canadian securities regulatory authorities. All forward-looking statements presented herein should be considered in conjunction with such filings. All forward-looking statements are made as of this date and the Fund assumes no obligation to update such statements.
Boyd Group Services Inc.
1745 Ellice Avenue
Boyd Group Services Inc.
1745 Ellice Avenue
Winnipeg, Manitoba, R3H 1A6