WINNIPEG, July 2, 2015 /CNW/ - Exchange Income
Corporation (TSX: EIF) ("EIC" or the "Corporation"), a diversified,
acquisition-oriented company announced today it has successfully
closed the acquisition of all of the issued and outstanding shares
of Ben Machine Products Company Incorporated ("Ben Machine") for
approximately $46 million, subject to
customary post-closing adjustments.
Ben Machine, headquartered in Vaughan,
Ontario, is a leading manufacturer that provides complex
precision-machined components and assemblies primarily for the
aerospace and defence industry. Ben Machine is focused on providing
a complete solution for their customers and offers a full range of
services, including CNC machining and turning, brazing, casting,
welding, complex assembly, sheet metal fabrication, and all
necessary finishing services. Ben Machine's services are compliant
with many military, aerospace, nuclear and commercial standards
that have the highest acceptance rate standards and strict
measurement guidelines.
EIC paid a total purchase price of approximately $46 million, subject to customary post-closing
adjustments, of which $6.8 million
(approximately 15%) was paid through the issuance of 329,552 common
shares of EIC. The balance of $39.2
million was paid in cash and financed through the
Corporation's existing credit facility.
Ben Machine has had annual revenues ranging between $20 million to $25 million in each of the last
five years. The purchase price at approximately $46 million is based on an EBITDA multiple that
is within the range of prior acquisitions made by the Corporation.
The transaction is immediately accretive to EIC's per share metrics
and is expected to generate a return of capital over 15%.
"This is a strategic acquisition for us as it further adds to
our manufacturing operations and complements and expands our niche
within our aerospace sector," stated Mike
Pyle, Chief Executive Officer of EIC. "The company is not
your traditional manufacturer, rather Ben Machine is a service
company that provides solutions for top of class aerospace and
defence companies in Canada and
the United States. This
established niche has enhanced Ben Machine's position with its
customers as they rely on Ben Machine to produce and deliver high
precision complex parts as part of their manufacturing supply
chain. The company is led by a strong management team that has a
clear understanding of their value added capabilities, their
markets and their customers. We look forward to Ben Machine being
part of EIC."
Matteo Iacovelli, the founder and
shareholder of Ben Machine commented, "Over the span of 40 years,
my family built this company and watched it grow from a local
manufacturing facility to a successful international aerospace and
defence manufacturing solutions company that services world class
blue chip customers. I'm very pleased that my two sons, Michael and
Adrian, who have led the company over the past several years will
continue to help drive the business as it moves forward. Partnering
with EIC will allow Ben Machine to continue to grow and expand into
the future. We chose EIC because of their operating philosophy
which, with their oversight and guidance, will allow Ben Machine to
continue providing world class solutions to the aerospace and
defence industry."
Mr. Pyle added, "We are excited about the addition of Ben
Machine to EIC, further growing our manufacturing segment. We look
forward to releasing our second quarter results in mid-August and
providing further details on this acquisition during our second
quarter results conference call."
About Exchange Income Corporation
Exchange Income Corporation is a diversified
acquisition-oriented company, focused in two sectors: aviation
services and equipment, and manufacturing. The Corporation uses a
disciplined acquisition strategy to identify already profitable,
well-established companies that have strong management teams,
generate steady cash flow, operate in niche markets and have
opportunities for organic growth.
The Corporation currently operates two segments: Aviation and
Manufacturing. The Aviation segment consists of the operations by
Perimeter Aviation, Keewatin Air, Calm Air International, Bearskin
Lake Air Service, Custom Helicopter, Regional One and Provincial
Aerospace. The Manufacturing segment consists of the operations by
Jasper Tank, Overlanders
Manufacturing, Water Blast Manufacturing, Stainless Fabrication,
WesTower Communications in Canada
and Ben Machine. For more information on the Corporation, please
visit www.ExchangeIncomeCorp.ca. Additional information relating to
the Corporation, including all public filings, is available on
SEDAR (www.sedar.com).
Caution concerning forward-looking statements
The statements contained in this news release that are
forward-looking are based on current expectations and are subject
to a number of uncertainties and risks, and actual results may
differ materially. These uncertainties and risks include, but are
not limited to, the dependence of Exchange Income Corporation on
the operations and assets currently owned by it, the degree to
which its subsidiaries are leveraged, the fact that cash
distributions are not guaranteed and will fluctuate with the
Corporation's financial performance, dilution, restrictions on
potential future growth, the risk of shareholder liability,
competitive pressures (including price competition), changes in
market activity, the cyclicality of the industries, seasonality of
the businesses, poor weather conditions, and foreign currency
fluctuations, legal proceedings, commodity prices and raw material
exposure, dependence on key personnel, and environmental, health
and safety and other regulatory requirements. Further information
about these and other risks and uncertainties can be found in the
disclosure documents filed by Exchange Income Corporation with the
securities regulatory authorities, available at
www.sedar.com.
SOURCE Exchange Income Corporation