BFI Canada Income Fund has announced it has entered into a binding agreement to purchase the non-hazardous solid waste and recycling collection business and transfer station of Complete Disposal Services Inc. ("CDS") located in the Greater Toronto Area (GTA).
The $29 million acquisition inclusive of working capital and transaction costs is expected to close within days, and will be fully funded through a combination of $7 million of cash plus $22 million in drawings from BFI Canada’s credit facilities. The acquisition is expected to be 3 to 4 per cent accretive to BFI Canada Income Fund’s free cash flow available for distribution (1).
CDS is one of the leading waste management companies in the GTA. Well established and privately held, it provides non-hazardous solid waste and recycling collection services to commercial and industrial customers. The company also owns and operates a 37,000 square foot transfer station and material recovery facility located in the City of Vaughan.
"CDS is an excellent addition to BFI Canada," said Keith Carrigan, BFI Canada President and CEO, "because it expands and strengthens our presence in Canada’s largest market for environmental services, increases our productivity and improves our route density. Most importantly, the transaction is immediately accretive to unit holders and is entirely consistent with our stated objective of complementing our organic growth with strategic acquisitions in new and existing markets."
"With this acquisition, our opportunity to play a greater role in meeting Ontario’s waste management needs is significantly enhanced," said Martin Irish, BFI Canada’s Vice-President of Ontario and Manitoba. "Our environmentally sound and proven waste management practices are of the highest standard, making us an important part of the solution to Ontario’s long-term waste management requirements."
About BFI Canada
BFI Canada Income Fund, through its subsidiaries, is one of Canada’s largest full-service waste management companies, providing non-hazardous solid waste collection and landfill disposal services for municipal, commercial, industrial and residential customers in the provinces of British Columbia, Alberta, Manitoba, Ontario and Quebec. The Fund’s units are listed on the Toronto Stock Exchange under the symbol BFC.UN.
For more information on the Fund, visit www.bficanada.com
(1) The Fund has adopted a measurement called free cash flow available for distribution to supplement net income as a measure of operating performance. Free cash flow available for distribution is a term which does not have a standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures used by other issuers. The objective of presenting this non-GAAP measure is to calculate the amount, which is available for distribution to unit holders. Free cash flow available for distribution is calculated as EBITDA(2) less amortization of capitalized landfill asset closure and post-closure costs, interest on long-term debt, current income taxes and maintenance capital expenditures. Additionally, the Fund’s gain on settlement of two bond forward contracts on June 25, 2004 will be amortized to free cash flow available for distribution over the underlying terms of the senior secured debentures. Free cash flow available for distribution is not necessarily indicative of cash available to fund cash needs and should not be considered as an alternative to cash flow as a measure of liquidity. All references in this press release to "free cash flow available for distribution" have the meaning set out in this note.
(2) References in this press release to "EBITDA" are to earnings before interest, income taxes, depreciation and amortization. Management of the Fund believes that, in addition to net earnings, EBITDA is a useful complementary measure of cash available for distribution prior to debt service, capital expenditures and income taxes. However, EBITDA is not a recognized measure under Canadian GAAP and does not have a standardized meaning prescribed by Canadian GAAP. Investors are cautioned that EBITDA should not be construed as an alternative to net earnings determined in accordance with Canadian GAAP, as an indicator of performance of the BFI business or to cash flows from operating, investing and financing activities as a measure of liquidity and cash flows. The Fund’s method of calculating EBITDA may differ from the methods used by other entities and, accordingly, its EBITDA may not be comparable to similarly titled measures used by other entities.
This document may contain forward-looking statements relating to the Fund’s operations or to the environment in which it operates, which are based on the Fund’s operations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict, or are beyond the Fund’s control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. These factors include those set forth in the Fund’s renewal Annual Information Form for the period ended December 31, 2003. Consequently, readers should not rely on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they are made. Although the forward-looking statements contained herein are based upon what management believes to be reasonable assumptions, the Fund cannot assure unit holders that actual results will be consistent with these forward looking statements, and the Fund disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
BFI Canada Income Fund
President & Chief Executive Officer
BFI Canada Income Fund
Manager, Investor and Employee Relations