Jan 30 2010
K-Bro Linen Income Fund (TSX: KBL.UN) ("K-Bro" or the "Fund") announced today that it has completed its previously-announced acquisition of an existing linen business located in Burnaby, B.C. The acquired business consists of Vancouver healthcare institutions and hospitality customers in both the greater Vancouver area and Whistler, British Columbia. K-Bro acquired all assets of the owner's Vancouver linen business including the processing plant that operates from a leased facility.
The purchase price is $11.5 million, with additional amounts paid for working capital above a normalized level. Annual revenues from the acquired business were $14.4 million in its most recent fiscal year ended June 30, 2009. Management estimates that adjusted EBITDA was approximately $1.7 million for that fiscal year. These operating results, combined with potential synergies, results in an acquisition that management believes will be immediately accretive to the Fund.
The purchase was financed from the Fund's existing bank line of credit.