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Village of Nobleford
Box 67. Nobleford, AB .T0L 1S0. Municipal Office, 906 Highway Avenue
Phone (403) 824-3555. Fax 824-3553. E-mail: admin@village.nobleford.ab.ca
Office is open Tuesday through Friday, 8:30am-12:00, 1:00 -4:30 pm
Kirk Hofman
Chief Administrative Officer, Village of Nobleford
May 31, 2007
Ag Growth Announces Strategic Acquisition , NOBLEFORD ALBERTA
CANADA
WINNIPEG, MANITOBA,
Ag Growth Income Fund (TSX: AFN.UN) ("Ag Growth" or the "Fund") announced today it has entered into an agreement
to acquire substantially all of the operating assets of Twister Pipe Ltd. ("Twister") of Calgary, AB, for $6.2 million.
Twister manufactures grain storage bins, aeration equipment, and bin unload systems, with distribution focused in
western Canada. The Twister bin has been in production since 1978 and provides Ag Growth with its first foray into the
storage market, a logical extension of its line of grain handling and aeration equipment. In addition, Twister's line of
aeration and bin unload equipment will allow the Fund to expand its product offering and market share in storage related
handling and conditioning.
Revenues from Twister's business over the last three years have averaged $12.9 million. Historically, Twister has
achieved EBITDA margins of 10% to 15%, however in Twister's most recently completely fiscal year EBITDA decreased
to roughly break even due primarily to increased costs and productivity issues related to the severe labour shortage in
Calgary. Accordingly, in conjunction with the acquisition, the Fund intends to move production to its Edwards facility
in
Nobleford, Alberta.
Rob Stenson, Chief Executive Officer of the Fund, stated, "We are very excited to add Twister to the Ag Growth group of
companies. The Twister brand is a mainstay on farms in western Canada, and we look forward to capitalizing on what we
believe is going to be a positive storage environment in western Canada in the coming years." Mr. Stenson continued,
"Our understanding of their markets and our overlapping distribution networks will allow us to hit the ground running with
this established brand name. The Twister product line is a great fit for the production competencies at Edwards. We
expect that the transaction will be moderately dilutive during the transition period to
Nobleford, and will become
accretive into 2008."
FINANCING
The Fund has reached an agreement with TD Commercial Banking to provide debt financing to fund the acquisition and
related closing costs. Terms and conditions of the financing are consistent with the Fund's existing credit agreement. The
financing is subject to customary closing conditions and funding is scheduled for May 31, 2007.
Company Profile
Ag Growth is a leading manufacturer of portable and stationary grain handling and conditioning equipment, including
augers, belt conveyors, grain handling accessories and grain aeration equipment. Ag Growth's sales, marketing, and
distribution system includes approximately 1,400 dealers and distributors in 48 states and nine provinces.
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