Newalta Income Fund (Newalta) has announced that it has signed a purchase agreement to acquire the operating assets of Montreal, Qubec-based Nova Pb Inc. (Nova) for $55 million, consisting of $45 million in cash with the balance payable by the issuance of trust units of Newalta. Closing is expected to occur on November 1, 2007 and is subject to certain conditions and the receipt of all regulatory approvals, including the Toronto Stock Exchange. This transaction is immediately accretive to Newaltas cash available for growth and distributions on a per trust unit basis. For the trailing twelve-month period ended March 31, 2007, Nova generated approximately $58 million in revenue.
Nova operates Canadas largest integrated lead battery recycling facility located on a 20 hectare (50 acre) site in Ville Ste-Catherine, Qubec, on the south shore of Montreal, 12 kilometres from Newaltas new transfer station in Chateauguay. This facility has the capacity, with two long-body rotary kilns, to process up to 200,000 tonnes of used batteries and can produce up to 100,000 tonnes of recycled lead per year. Nova employs 115 people and is a leading supplier of custom lead alloys to the automotive and industrial battery manufacturing industries. Nova Pb-brand lead is an LME (London Metal Exchange) approved and traded brand.
This acquisition expands Newaltas services and adds processing capability to Newaltas eastern Canada facility network. While Nova is currently operating at 50 per cent capacity, with only one of its kilns in operation, there are numerous opportunities to add value using Newaltas national facility network to drive additional batteries to the facility. Novas shareholders are confident that Newalta is best positioned to take the business to a new stage of growth creating enhanced opportunities for Nova employees.
The addition of Novas industry-leading operations and experienced people doubles Newaltas presence in Qubec, provides tremendous opportunity to expand our market coverage in the province, and diversifies our services for our customers in eastern Canada, said Al Cadotte, President and Chief Executive Officer of Newalta. This transaction provides further stability to our cash flows and immediate value to our investors, and adds another new recovery process technology for us.
About the North American Lead Recycling Market
With a recycling rate of over 97 per cent, lead has the highest secondary production rate of all recycled materials, producing a stable and predictable supply of scrap lead-acid batteries for North American lead recyclers.
As a result of environmental concerns associated with lead mining and disposal, lead production from secondary sources such as scrap lead-acid batteries is becoming increasingly popular. Recycled, or secondary lead, is identical in every respect to lead that is mined from its original source.
Increasing automobile production is expected to continue to drive demand for lead. There are now over 100 million automotive batteries sold in the US and Canada and the shipment of lead-acid batteries for industrial applications, such as stationary or stand-by power, also continues to grow every year. Over 1.5 million tonnes of lead is consumed in North America for use in the battery industry alone.
For further information on Nova, please visit www.novapb.com
Newalta Income Fund is one of Canadas leading industrial waste management and environmental services companies and focuses on maximizing the value inherent in industrial waste through the recovery of saleable products and recycling. It also provides environmentally sound disposal of solid, non-hazardous industrial waste. With talented people and a national network of facilities, Newalta serves customers in the automotive, forestry, manufacturing, mining, oil and gas, petrochemical, pulp and paper, steel and transportation service industries. Providing solid investor returns, exceptional customer service, safe operations and environmental stewardship has enabled Newalta to expand into new service sectors and geographic markets. Newalta Income Funds units trade on the TSX as NAL.UN. For more information, visit www.newalta.com
Contact Anne MacMicken, Director, Investor Relations, 403-806-7019 or Ronald Sifton, Executive Vice President and Chief Financial Officer, 403-806-7020.