Business
Sun Gro completes Quebec acquisition, strengthens long-term peat moss supply
Sun Gro completes Quebec acquisition, strengthens long-term peat moss supply.
About this update from Coloured Ties Capital Inc
[{"type":"text","content":"\n\n\n\nTrading Symbol: The Toronto Stock Exchange - GRO.UN\n\n\nVANCOUVER, Aug. 7 /CNW/ - Sun Gro Horticulture Income Fund (the Fund)\ntoday announced that its wholly owned subsidiary, Sun Gro Horticulture Canada\nLtd. (Sun Gro or the company), has acquired Quebec peat moss producer\nTourbiere Omer Belanger Inc. for $3.9 million. The transaction was funded\nthrough Sun Gro's existing acquisition line of credit and is expected to be\naccretive to the Fund's unitholders beginning in 2008.\n\n\nThis acquisition, which closed on August 6, 2007, has given Sun Gro a\nphysical presence in Quebec while strengthening its long-term peat supply and\nenhancing the geographic diversity of its peat harvest resources. The purchase\nincluded 1,900 acres of largely undeveloped professional-grade peat bogs, 140\nacres of retail-grade bogs and three adjacent production facilities. With\nplanned expansion of the harvest area this summer, the newly-acquired bogs are\nexpected to add approximately 500,000 equivalent bales (Sun Gro's standard\nunit of volume measurement, referring to 10 cubic feet of peat) to the\ncompany's 2008 harvest.\n\n\n"At current peat prices and foreign exchange rates, the Tourbiere Omer\nBelanger holdings could support $4.5 million in additional sales beginning\nnext year, and grow from there," said Mitch Weaver, President and CEO of Sun\nGro and a Trustee of the Fund, adding that, "The new bogs will help ensure our\nability to provide high-quality peat to our core professional grower\ncustomers, who remain our primary focus."\n\n\nThe transaction was Sun Gro's third acquisition in 2007. In January, the\ncompany established a local manufacturing presence in California, North\nAmerica's largest horticultural market, by acquiring Sun-Up Horticulture in\nSacramento and Kellogg-Rich Grow, LLC in Santa Maria. Sun Gro now operates 14\nCanadian peat and peat-mixing plants and 11 US peat and bark-mixing plants,\nand has approximately 63,000 acres of peat bogs under lease.\n\n\nIncome Fund Profile\n\n\nSun Gro Horticulture Income Fund was launched with the completion of an\nInitial Public Offering of 22,023,000 trust units on March 27, 2002. The Fund\nis dependent on Sun Gro's operations, with monthly distributions to its\nunitholders based entirely on Sun Gro's performance.\n\n\nCompany Profile\n\n\nSun Gro was f...