TORONTO, ONTARIO–(Marketwire – Sept. 3, 2010) – The Consumers' Waterheater Income Fund ("Fund") (TSX:CWI.UN) today announced that a wholly-owned subsidiary of the Fund has entered into a definitive agreement to purchase all of the outstanding shares of Enbridge Electric Connections Inc. ("EECI") for approximately $23.7 million in cash, subject to a potential adjustment based on working capital at close. EECI is principally engaged in the provision of equipment and services under long-term contracts with customers to allow "smart" sub-metering and remote measurement of electricity and water in multi-unit condominium complexes and apartment buildings in Ontario. With approximately 30,000 billing customers, EECI's business is complementary to the Fund's existing "smart" sub-metering business conducted through Stratacon Inc. ("Stratacon"). EECI's customer base is predominantly in the new and retro-fit condominium market segments, while Stratacon's core market focus is in the retro-fit rental apartment sector.
The Fund expects the acquisition to be accretive to EBITDA(1) in 2011. The expectation is based on projected growth in units installed and billed, current run rates on margins, improvements in operating expenses based on available synergies and a favourable regulatory environment for sub-metering. No assurance can be given, however, that these projections will be achieved.
"The acquisition of EECI strengthens the Fund's position in the sub-metering market," said John Macdonald, President and Chief Executive Officer of the Fund. "With significantly improved access to the Ontario condominium market and an increase in business scale, this transaction will help drive growth and broaden market diversification for the Fund." The Fund will finance the acquisition with cash on hand.
The acquisition is anticipated to close o n or about October 1, 2010. While the Fund has completed its due diligence of EECI and the Fund's board of trustees has unanimously approved the transaction, the acquisition is subject to closing conditions customary for a transaction of this nature. Consequently, there can be no assurance that the proposed acquisition will close.
The transaction approximately doubles the Fund's sub-metering business by combining the two largest non-utility sub-metering businesses in Canada.
Conference Call and Webcast
Management will host a conference call and live audio webcast on Friday, September 3, 2010 at 2:00 p.m. (ET) to discuss the acquisition. Messrs. John Macdonald, President and CEO and Steve Bower, CFO, will be on the call.
|The call can be accessed as follows:|
A taped rebroadcast will be available until midnight on September 13, 2010. To access the rebroadcast, please dial 416.640.1917 or 1.877.289.8525 and enter the pass code 4361492#.
For additional information about EECI please visit www.enbridgeelectric.com.
About The Consumers' Waterheater Income Fund
The Fund owns a portfolio of approximately 1.3 million installed water heaters and other assets, rented primarily to residential customers in Ontario. The Fund also owns Stratacon Inc., a leading "smart" sub-metering company, with metering contracts for condominium and apartment suites in Ontario, Alberta and elsewhere in Canada.
Additional information regarding the Fund, including its current Annual Information Form is available on SEDAR at www.sedar.com.
Certain statements in this news release are forward-looking statements, which reflect management's expectation regarding the Fund's growth, r esults of operations, performance, business prospects and opportunities. Such forward-looking information reflects management's current beliefs and is based on information available to them and/or assumptions management believes are reasonable. Many factors could cause results to differ materially from the results discussed in the forward-looking information. Although the forward-looking information is based on what management believes to be reasonable assumptions, the Fund cannot assure investors that actual results will be consistent with this forward-looking information. Except as required by applicable securities laws, the Fund does not intend and does not assume any obligation to update or revise the forward-looking information, whether as a result of new information, future events or otherwise.
(1) EBITDA is a non-GAAP measure and does not have a standardized meaning as prescribed by GAAP and may not be comparable to similar terms and measures presented by other issuers. EBITDA comprises net earnings plus income taxes, interest expenses and amortization expense, less interest income.
For further information: The Consumers’ Waterheater Income Fund
R. Stephen Bower
1.905.695.7793 or 1.800.781.2943