Trading Symbol: The Toronto Stock Exchange - GRO.UN
VANCOUVER, Jan. 24 /CNW/ - Sun Gro Horticulture Income Fund (the Fund) today announced that its wholly owned subsidiary, Sun Gro Horticulture Canada Ltd. (Sun Gro or the company), has acquired all of the operating assets of Santa Maria, California horticultural growing mix producer, Kellogg-Rich Grow, LLC. for US $0.9 million. In addition, Sun Gro purchased product inventory on hand for US $0.2 million.
The transaction, which closed on January 23, 2007, is Sun Gro's second acquisition in California in less than two weeks. On January 16, 2007, the company acquired all of the outstanding shares of Sacramento horticultural growing mix and bark producer, Sun-Up Horticulture for US $4.3 million.
The Kellogg-Rich Grow acquisition adds a modern peat-mixing plant to Sun Gro's North America-wide network of 20 production facilities, three of which were acquired as part of the earlier Sun-Up Horticulture transaction. The four newly added plants have significantly enhanced Sun Gro's ability to target greenhouse growers, ornamental nurseries, landscapers, vegetable transplant growers and retailers throughout California. The plant acquired yesterday is located in the state's Central Coast region and will complement the inland sites acquired earlier in the month.
"These two acquisitions are allowing us to realize our long-term goal of increased participation in the largest horticultural market in North America," said Mitch Weaver, President and CEO of Sun Gro and a Trustee of the Fund. "The new plants are ideally situated to boost our share of both the professional and retail growing mix markets in California."
The Kellogg-Rich Grow acquisition was funded through Sun Gro's existing acquisition line of credit and is expected to be modestly accretive to the Fund's unitholders this year. The new Santa Maria mix plant is expected to add approximately US $3.0 million to the company's 2007 sales.
Income Fund Profile
Sun Gro Horticulture Income Fund was launched with the completion of an Initial Public Offering of 22,023,000 trust units on March 27, 2002. The Fund is dependent on Sun Gro's operations, with monthly distributions to its unit holders based entirely on Sun Gro's performance.
Company Profile
Sun Gro was founded in 1929 in Vancouver, BC and has grown to become North America's largest producer of sphagnum peat, and the largest distributor of peat moss and peat and bark-based growing media to professional plant growers in the US and Canada. Sun Gro sells its professional products primarily to greenhouse, nursery and specialty crop growers, as well as to golf course developers and landscapers. Sun Gro also sells peat moss and peat-based growing mixes to retail customers, either by way of private label partnerships or under its own brand names. Approximately 80% of the company's sales volume goes to the US.
Forward-Looking Statements
This news release contains forward-looking statements. These statements relate to future events or future performance and reflect Sun Gro's expectations regarding its growth, results of operations, performance, business prospects, opportunities or industry performance or trends. These forward-looking statements reflect management's current internal projections, expectations or beliefs and are based on information currently available. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "intend", "plan", "anticipate", "believe", "predict", "potential", "continue" or the negative of these terms or other comparable terminology. A number of factors could cause actual events or results to differ materially from those discussed in the forward-looking statements. Important factors that could cause actual results to differ materially from Sun Gro's expectations include, among other things, fluctuations in currency exchange rates, changes in tax laws, the impact of adverse weather conditions on harvesting operations, an increase in freight rates, and the impact of an increase in fuel costs. You should specifically consider these factors, including the risks and uncertainties described in the Fund's most recent annual information form for the year ended December 31, 2005. In addition, the Fund's ability to make distributions to unitholders is entirely dependent on Sun Gro's performance. Although management believes that the forward-looking statements contained in this news release are based on reasonable assumptions, readers cannot be assured that actual results will be consistent with such statements. Forward-looking statements are made as of the date of this news release and Sun Gro assumes no obligation to update or revise them to reflect new events or circumstances.
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