10:38:36 EDT Fri 29 Mar 2024
Enter Symbol
or Name
USA
CA



Exchange Income Corp
Symbol EIF
Shares Issued 23,117,835
Close 2015-07-02 C$ 20.40
Market Cap C$ 471,603,834
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Exchange Income closes Ben Machine buy for $46-million

2015-07-02 17:17 ET - News Release

Mr. Mike Pyle reports

EXCHANGE INCOME CORPORATION COMPLETES ACQUISITION OF BEN MACHINE PRODUCTS

Exchange Income Corp. has closed the acquisition of all of the issued and outstanding shares of Ben Machine Products Company Inc. for approximately $46-million, subject to customary postclosing adjustments.

Ben Machine, headquartered in Vaughan, Ont., is a leading manufacturer that provides complex precision-machined components and assemblies primarily for the aerospace and defence industry. Ben Machine is focused on providing a complete solution for its customers and offers a full range of services, including CNC machining and turning, brazing, casting, welding, complex assembly, sheet metal fabrication, and all necessary finishing services. Ben Machine's services are compliant with many military, aerospace, nuclear and commercial standards that have the highest acceptance rate standards and strict measurement guidelines.

Exchange Income paid a total purchase price of approximately $46-million, subject to customary postclosing adjustments, of which $6.8-million (approximately 15 per cent) was paid through the issuance of 329,552 common shares of Exchange Income. The balance of $39.2-million was paid in cash and financed through the corporation's existing credit facility.

Ben Machine has had annual revenues ranging between $20-million to $25-million in each of the last five years. The purchase price at approximately $46-million is based on an earnings before interest, taxes, depreciation and amortization multiple that is within the range of prior acquisitions made by the corporation. The transaction is immediately accretive to EIC's per share metrics and is expected to generate a return of capital over 15 per cent.

"This is a strategic acquisition for us as it further adds to our manufacturing operations, and complements and expands our niche within our aerospace sector," stated Mike Pyle, chief executive officer of Exchange Income. "The company is not your traditional manufacturer. Rather Ben Machine is a service company that provides solutions for top-of-class aerospace and defence companies in Canada and the United States. This established niche has enhanced Ben Machine's position with its customers as they rely on Ben Machine to produce and deliver high-precision complex parts as part of their manufacturing supply chain. The company is led by a strong management team that has a clear understanding of their value-added capabilities, their markets and their customers. We look forward to Ben Machine being part of EIC."

Matteo Iacovelli, the founder and shareholder of Ben Machine, commented: "Over the span of 40 years, my family built this company and watched it grow from a local manufacturing facility to a successful international aerospace and defence manufacturing solutions company that services world-class blue-chip customers. I'm very pleased that my two sons, Michael and Adrian, who have led the company over the past several years, will continue to help drive the business as it moves forward. Partnering with EIC will allow Ben Machine to continue to grow and expand into the future. We chose EIC because of their operating philosophy, which, with their oversight and guidance, will allow Ben Machine to continue providing world-class solutions to the aerospace and defence industry."

Mr. Pyle added: "We are excited about the addition of Ben Machine to EIC, further growing our manufacturing segment. We look forward to releasing our second quarter results in mid-August and providing further details on this acquisition during our second quarter results conference call."

We seek Safe Harbor.

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