WINNIPEG, MB, Aug. 4, 2020 /CNW/ - Exchange Income Corporation
(TSX: EIF) ("EIC" or the "Corporation") a diversified,
acquisition-oriented company focused on opportunities in the
aviation, aerospace and manufacturing sectors, announced today it
has successfully closed the acquisition of all of the issued and
outstanding shares of Window Installation Specialists, Inc.
("WIS"), a privately owned US company, for US$45 million, subject to customary post-closing
adjustments.
WIS, founded in 1998 and located in Seattle, Washington, is a full-service glazing
company specializing in sales, consultation, installation and
service of pre-glazed fenestration products. WIS's operational
focus is the United States west
coast, specifically Seattle,
Washington; Southern
California (Los Angeles and
San Diego); and the Bay area
(Oakland, San Jose, San
Francisco). WIS counts Quest as one of its key suppliers, as
it has been Quest's glazer in this market for the last decade.
Together they provide services under supply and install contracts,
where the supply and install each represent a significant portion
of the contract.
The purchase price of US$45
million was funded by issuance of EIC common shares to the
vendor of US$7 million and the
Corporation's available cash resources from its unutilized credit
facility of US$38 million. The
acquisition is expected to be immediately accretive to EIC's per
share metrics and generates a pre-tax return on capital in excess
of 20% based on historical results. WIS has expanded over the
past 3 years and at the time of close has a backlog of over 3 times
its last year's revenue.
"The acquisition of WIS represents a significant strategic
investment further vertically integrating Quest's operations.
Combined with the acquisition of AWI, we now have considerable
breadth of distribution and installation expertise across the US
market, similar to Canada," said
Mr. Mike Pyle, CEO of EIC.
Pyle added, "The global pandemic has resulted in uncertainty in
many industries. However, EIC's diversified business model and the
consistent strength of our balance sheet allows us to continue to
execute on our growth model. Adding a highly accretive business and
strategic asset to Quest, even in the midst of a global pandemic,
further demonstrates the resiliency of our business strategy."
Louis Mark, the owner and CEO of
WIS, has committed to continue in his current role. In explaining
the decision to sell to EIC, Mark stated, "We knew we had a great
partner in Quest and wanted to solidify our relationship. This
transaction will ensure we can continue to build that successful
partnership and strengthen the company's long-term future. I
am confident this is the right decision for our company, our
employees, and our customers."
"We are thrilled about the acquisition of WIS," stated
Martin Cash, the CEO of Quest.
"Quest began working with WIS more than 10 years ago and we have
experienced firsthand the professionalism and the value they
provide as a leader in the market. Partnering with Lou and his team
at WIS will enable Quest to continue to provide the best value and
comprehensive offering to our customers. We are excited that when
considered with our install capabilities in Canada and with our 2019 AWI acquisition in
the northeast US market, we now have the ability to serve regional
and national customers supply and install in all our markets and
have an exciting platform for expanding to new markets!"
About Exchange Income Corporation
Exchange
Income Corporation is a diversified acquisition-oriented company,
focused in two sectors: aerospace & 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. 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).
About Quest Window Systems Inc.
Quest Window Systems
Inc. ("Quest"), an EIC subsidiary, designs and manufactures a
unitized window wall system with a primary application for the
building envelope of high-rise multi-residential projects. Founded
in 2000, with its headquarters located in Mississauga, Ontario and manufacturing
facilities located in Mississauga,
Ontario and Garland, Texas,
it offers a fresh alternative to the traditional window wall and
curtain wall markets, thanks to its ECOWALLTM product and the
supporting design assist system. Quest's differentiated offering
combined with its established reputation has resulted in strong and
growing brand equity across its markets in Canada and in the Western, Mid-Western, and
North-Eastern regions of the United
States.
About Window Installation Specialists, Inc.
Window
Installation Specialists, Inc. specializes in sales, consultation,
field-testing, installation and quality customer service of
pre-glazed fenestration (window) products. WIS's focus includes:
Multi-Family Residential, Garden Style Apartments, Mid-Rise,
High-Rise, New Construction, and Rehabilitation.
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. Except as required by
Canadian Securities Law, Exchange does not undertake to update any
forward-looking statements; such statements speak only as of the
date made. 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
