Business
Sun Gro to add new bogs in Quebec, enhance geographic diversity of peat resources
Sun Gro to add new bogs in Quebec, enhance geographic diversity of peat resources.
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, June 5 /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 entered into an agreement to acquire\nQuebec-based peat moss producer Tourbiere Omer Belanger Inc. for $3.9 million.\n\n\nThe transaction, which is expected to close at the end of June 2007, will\nstrengthen Sun Gro's long-term peat supply in eastern Canada while increasing\nthe geographic diversity of its peat harvest resources. The acquisition\nincludes 1,900 acres of largely undeveloped professional grade peat bogs,\n140 acres of retail grade bogs and three adjacent production facilities, all\nlocated in Quebec.\n\n\n"The Tourbiere Omer Belanger acquisition will give us a physical presence\nin Quebec and support our ability to provide uninterrupted supply to our core\nprofessional grower customers," said Mitch Weaver, President and CEO of Sun\nGro and a Trustee of the Fund. "With 1,615 acres of unopened professional\ngrade bogs and an additional 285 acres that have recently been opened, these\nnew holdings will provide a source of high quality peat for many years to\ncome."\n\n\nThe acquisition will be funded through Sun Gro's existing acquisition\nline of credit and is expected to be accretive to the Fund's unitholders\nbeginning in 2008. With planned expansion of the harvest area over the coming\nsummer months, the newly-acquired bogs are expected to add approximately\n500,000 equivalent bales (Sun Gro's standard unit of volume measurement,\nreferring to 10 cubic feet of peat) to the company's 2008 harvest. "At current\npeat prices and foreign exchange rates, this could support $4.5 million in\nadditional sales beginning next year, and grow from there," said Weaver.\n\n\nThe transaction will be Sun Gro's third acquisition in 2007. In January,\nthe company 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. The two California\ntransactions added four plants to Sun Gro's North America-wide production\nnetwork.\n\n\nOn completion of the Tourbiere Omer Belanger acquisition, Sun Gro will\nhave 14 Canadian peat an...