FORT ERIE, Ont. — Customs broker Livingston International Income Fund has just announced that it has successfully completed the acquisition of the assets of competitor PBB Global Logistics Income Fund.
“We are very pleased to have concluded this key strategic transaction, with the support of PBB’s board and management and so many of its unitholders,” said Peter Luit, president and chief executive officer of Livingston International Inc. in a company release. “We welcome them as unitholders of our fund and we also welcome PBB’s employees and clients. We are confident that combining the operations of the two groups will prove to be a significant and positive move for all our stakeholders.”
Luit added that “we intend to be a major force in the highly competitive customs brokerage, trade services and transportation and logistics sectors and to deliver value to our investors, new services to our clients and enhanced career opportunities for our employees.”
The combined fund is expected to have a market capitalization of approximately $620 million – approximately 1.7 times the previous market capitalization of Livingston and approximately 2.5 times that of PBB. Under the transaction, 3,035,004 PBB units were deposited to the “offer election” alternative and 5,308,312 PBB units were deposited to the “merger election” alternative, representing in total, approximately 78% of the outstanding PBB units. As a result, the special resolution in respect of, among other things, the tax effective merger transaction was approved by PBB unitholders.
With all conditions of the offer satisfied, earlier today Livingston took up and paid for all PBB units deposited to the offer, following which the merger transaction between Livingston and PBB was completed.
In accordance with the terms of the merger, the redemption of all of the issued and outstanding PBB units will occur at 12:01 a.m. (Toronto time) on Thursday, January 12, 2006. Former PBB unitholders are expected to receive their Livingston units payable under the offer and merger, as applicable, shortly following such redemption. In addition, PBB is expected to be delisted from the Toronto Stock Exchange shortly.
“Completing the offer is just the first step in making this acquisition a success. The key lies in the professional and focused implementation of our integration plan, which is already under way and draws on our experience from previous acquisitions.” Luit said.
As announced earlier, Livingston intends to increase its regular monthly distribution by 10% to $0.142 per unit, commencing with the monthly distribution expected to be declared on or after March 15, 2006. On an annualized basis, the increased monthly distribution represents $1.70 per Livingston unit.
In connection with the acquisition of the assets of PBB, Livingston has also entered into a new credit facility for the purposes of the combined businesses with a syndicate of lenders in the amount of up to $250 million for a term of five years, consisting of a revolving line of credit available for operations, capital expenditures and acquisitions as well as a term facility.
With the addition of the operations of PBB Global Logistics, Livingston and its subsidiaries have more than 3,000 employees located at key border points and other strategic locations across Canada and the United States.
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