WesternOne Equity Income Fund recently completed the purchase of the assets and the business of Old Country Rentals Ltd. for CA $8.0 million (about U.S. $7.5 million) after closing adjustments, and subject to a post-closing working capital adjustment.
Old Country Rentals is an equipment rentals business with two locations, and is a leading player in the lower Vancouver Island equipment rental industry.
WesternOne Equity paid for the acquisition using a combination of existing cash and the issuance to Old Country Rentals Ltd. of 150,000 trust units. This investment is expected to be immediately accretive to WesternOne Equity's unitholders, by an initial projected increase of approximately CA $2.3 million (U.S. $2.2 million) in annual EBITDA.
Based on the expected accretiveness of the acquisition, the board of trustees has approved an 11.1-percent increase in the cash distribution, from CA $0.045 to $0.05 (U.S. $0.042 to $0.046) per trust unit effective July 1 (equivalent to CA $0.60 (U.S. $0.56) per trust unit on an annualized basis).
“This acquisition allows us to make significant progress towards our 2007 objective of $50 million to $100 million of acquisitions at terms that are accretive to our unitholders,” said Darren Latoski, CEO of WesternOne Equity. “The acquisition provides an excellent fit to our existing rental business, WEQ Production Equipment LP, and we will continue to look to consolidate in this industry under the Production Equipment and Old Country Rentals brands in the future.”
In conjunction with our recently announced closing of $18.0 million public offering of trust units, management continues to work to generate stable and growing distributions to its unitholders through building our business conservatively with prudent financings, low debt leverage and sensible distributions.
WesternOne Equity has been established to seek out and acquire predominantly privately owned businesses located primarily in the Western Canadian provinces of British Columbia, Alberta and Saskatchewan, in order to generate stable and growing distributions to its unitholders as well as to achieve overall capital appreciation.