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Morneau Sobeco Income Fund Completes The Acquisition of Shepell·fgi
Toronto, June 2, 2008 – Morneau Sobeco Income Fund (TSX: MSI.UN) (the “Fund”) is pleased to announce that it has completed today its previously announced indirect acquisition of substantially all the assets of Shepell·fgi from Clairvest Group Inc. and its partners.
“Combining the operations of Morneau Sobeco and Shepell·fgi creates a dynamic organization with enhanced growth opportunities,” said Bill Morneau, Chairman and CEO of Morneau Sobeco. “I am excited about the future of our two companies as we go forward together,” he said.
Morneau Sobeco and Shepell·fgi will continue to serve their clients independently. Both organizations will maintain their existing leadership teams and brand identities, and continue using their current client service models.
The portion of the purchase price payable at closing was approximately $245 million after preliminary working capital adjustments. The acquisition was financed in part through the public offering, on a bought deal basis, of 12,750,000 units at a price of $12.00 per unit for gross proceeds of $153 million. The syndicate of underwriters was led by National Bank Financial Inc., BMO Capital Markets and TD Securities.
As well, Morneau Sobeco has obtained a new $200 million four-year credit facility arranged by National Bank Financial Inc. and underwritten by National Bank of Canada. The syndication agent is Toronto Dominion Bank and the documentation agent is Bank of Montreal. This new credit facility replaces Morneau Sobeco’s existing $50 million credit facility. At closing, approximately $140 million was drawn down to finance a portion of the purchase price payable at closing as well as to repay existing indebtedness.
About Morneau Sobeco
Morneau Sobeco is the largest Canadian-owned pension and benefits consulting and outsourcing firm, providing services to organizations across Canada and in the United States. With over 1,200 employees in offices in 12 cities across North America, Morneau Sobeco has focused on the integrated design and delivery of pension and benefit plans for over 40 years. Units of Morneau Sobeco Income Fund trade on the Toronto Stock Exchange under the symbol MSI.UN. Further information about Morneau Sobeco can be obtained on the firm’s web site at www.morneausobeco.com.
About Shepell·fgi
Shepell·fgi is Canada’s leading provider of health and productivity solutions, including prevention-focused Employee Assistance Programs, Employee Health Management and Workplace Training and Education. In business for 28 years, the company has 1,150 employees and services over eight million employees and their families across Canada, the United States and internationally. Shepell·fgi has its head office in Toronto and has regional offices in Halifax, Montréal, Ottawa, Winnipeg, Calgary, Edmonton and Vancouver, as well as U.S. offices in San Francisco, Minneapolis, and suburban New York City. Further information about Shepell·fgi can be obtained on the firm’s web site at www.shepellfgi.com.
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Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of applicable securities laws, such as statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Use of words such as “may”, “will”, “expect”, “believe”, or other words of similar effect may indicate a “forward-looking” statement. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including those described in Morneau Sobeco’s publicly filed documents (available on SEDAR at www.sedar.com) and in the firm’s MD&A under the heading “Risks and Uncertainties”. Those risks and uncertainties include income tax matters, ability to maintain profitability and manage growth, reliance on information systems and technology, reputational risk, dependence on key clients, reliance on key professionals and general economic conditions. Additional risks and uncertainties will also arise in connection with the acquisition and Shepell·fgi’s business, including without limitation: increased leverage and restrictive covenants; potential undisclosed liabilities associated with the acquisition and the Fund’s limited indemnification from the vendor of Shepell·fgi; the integration of the combined business; Shepell·fgi’s agreements with its customers; relationships with channel partners; competition; dependence on key customers; relationships with service providers; reliance on key personnel; regulatory risks; timing of revenue collection; fixed price contracts; currency fluctuations; confidentiality of client information; risks of future legal proceedings; and certain tax risks associated with the acquisition. Many of these risks and uncertainties can affect the firm’s actual results and could cause Morneau Sobeco’s actual results to differ materially from those expressed or implied in any forward-looking statement made by Morneau Sobeco or on the firm’s behalf. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. All forward-looking statements in this news release are qualified by these cautionary statements. These statements are made as of the date of this news release and, except as required by applicable law, Morneau Sobeco undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Additionally, Morneau Sobeco undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Fund, its financial or operating results or its securities.
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For further investor information, please contact:
William Morneau
Chairman & CEO
Morneau Sobeco Income Fund
Tel: (416) 445-2700
For media or client enquiries, please contact:
André Pinsonneault
Director, Corporate Communications
Morneau Sobeco
Tel: (416) 383-6499
Email: apinsonneault@morneausobeco.com
Karen Seward
SVP, Business Development & Marketing
Shepell·fgi
Phone: (416) 355-5410
Email: kseward@shepellfgi.com
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