TORONTO, Dec. 23 /CNW/ - Davis + Henderson, Limited Partnership ("D+H"),
a wholly-owned business of Davis + Henderson Income Fund (TSX: DHF.UN),
today announced that it has entered into a binding agreement to acquire
substantially all the assets of ASSET Inc. ("Asset") for a purchase
price of $76 million payable in cash. The acquisition is expected to
close on or about January 18, 2011, subject to satisfaction of
customary closing conditions.
ASSET is Canada's largest provider of technology based asset recovery
and insolvency management solutions to the Canadian financial services
industry. ASSET uses web-enabled platforms to manage, on behalf of
lenders, the recovery process around loans provided for moveable
property such as cars, trucks, boats and recreational vehicles. ASSET
also provides solutions to support real property recovery, unsecured
debt recovery, insolvency process management, and personal property
lien search and registration services. Headquartered in Toronto,
Ontario, ASSET employs approximately 240 people across the
country. Blair Franklin Capital Partners Inc. acted as financial
advisor to ASSET Inc. in this transaction.
Total annual revenues from the organization are expected to be less than
10% of D+H's consolidated annualized revenues. While specific
financial terms of the acquisition were not disclosed, the addition of
ASSET is expected to provide accretion for D+H shareholders in 2011, on
an Adjusted income basis (1), (2).
Strategic Rationale
By acquiring ASSET, D+H furthers its strategy of being a leading
provider of integrated solutions to the financial services industry.
D+H and ASSET serve substantially the same customers, including all of
Canada's leading financial institutions, across different parts of the
lending value chain. Bob Cronin, CEO of D+H said, "Our acquisition of
ASSET advances our objective of delivering an increasingly broad range
of end-to-end lending solutions to our customers. We currently have
several leading offerings related to the lending area, including
technology for loan origination and underwriting, as well as certain
loan servicing solutions, and with this acquisition we further deepen
our capabilities across the broader lending spectrum."
This acquisition also advances D+H's strategic objective of diversifying
revenues and cash flows. As well, the addition of ASSET is expected to
provide some additional stability to revenue as its business tends to
be economically counter-cyclical to certain other D+H service areas
where volumes and revenues generally move directionally with the
economy.
Added Gerrard Schmid, President and COO of D+H, "ASSET has a solid
reputation as a company that delivers value for its customers and we
are very pleased to be adding this strong group of experienced and
knowledgeable people to D+H. Working together, we believe we can grow
and enhance these market-leading solutions."
Acquisition Financing
D+H expects to fund the acquisition by drawing upon an extension of its
existing credit facilities. D+H has a commitment from its existing
lending syndicate to make available additional credit that would be
drawn from both a revolving and term component of the extended
facility.
Conference Call
Davis + Henderson will discuss the acquisition of ASSET Inc. via
conference call at 10:00 a.m. EST (Toronto time) on December 23, 2010.
The number to use for this call is 647-427-7450 for local/International
callers or 1-888-231-8191 for U.S./Canada callers. The conference call
will be hosted by Bob Cronin, Chief Executive Officer, Gerrard Schmid,
Chief Operating Officer and by Brian Kyle, Chief Financial Officer. The
conference call will also be available on the web by accessing CNW
Group's website www.newswire.ca/webcast/. For anyone unable to listen to the scheduled call, the rebroadcast
number will be: 416-849-0833 for Toronto area callers, or
1-800-642-1687 for all other callers, with Encore Password 34034068.
The rebroadcast will be available until January 6, 2011. An archive
recording of the conference call will also be available at the above
noted web address for one month following the call and a text version
of the call will be available at www.dhltd.com.
Notes:
|
(1)
|
Adjusted income is a non-GAAP measure of internal performance similar to
net income but calculated after removing the results of discontinued
operations and the non-cash impacts of mark-to-market gains and losses
on derivative instruments, amortization of intangibles from
acquisitions, and future tax recoveries or expenses.
|
|
(2)
|
The acquisition of ASSET, which is expected to close on January 18, 2011
will be accounted for under International Financial Reporting Standards
("IFRS"), for which there are several differences from Canadian
Generally Accepted Accounting Standards ("Canadian GAAP"). In general,
the differences between accounting for business combinations under IFRS
and Canadian GAAP are described in D+H's quarterly filings, including
its third quarter report to unit holders.
|
About D+H
Davis + Henderson is a leading solutions provider to the financial
services marketplace. Founded in 1875, the company today provides
innovative programs, technology products and technology based business
services to customers who offer chequing accounts, credit card
accounts, and personal, commercial, and other lending and leasing
products. For more information about Davis + Henderson visit http://www.dhltd.com/.
About ASSET Inc.
ASSET Inc. was founded in 1978 and is a leading Canadian provider of
insolvency management and asset recovery solutions. The company
currently supplies various collection-processing technology and
infrastructure services to all of Canada's 10 largest banks and
financial institutions. For further information, visit http://www.asset.net.
Caution Concerning Forward-Looking Statements
This press release contains certain statements that constitute
forward-looking information within the meaning of applicable securities
laws ("forward-looking statements"). Statements concerning Davis +
Henderson's objectives, goals, strategies, intentions, plans, beliefs,
expectations and estimates, and the intended dividend policy of the
Corporation are forward-looking statements. The words "believe",
"expect", "anticipate", "estimate", "intend", "may", "will", "would"
and similar expressions and the negative of such expressions are
intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. These
forward-looking statements are subject to important assumptions,
including the following specific assumptions: the ability of Davis +
Henderson to meet its revenue targets; general industry and economic
conditions; changes in Davis + Henderson's relationship with its
customers and suppliers; pricing pressures and other competitive
factors. Davis + Henderson has also made certain macroeconomic and
general industry assumptions in the preparation of such forward-looking
statements. While Davis + Henderson considers these factors and
assumptions to be reasonable based on information currently available,
they may prove to be incorrect.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of the business, or developments in Davis +
Henderson's industry, to differ materially from the anticipated
results, performance, achievements or developments expressed or implied
by such forward-looking statements.
Risks related to forward-looking statements include, among other things,
challenges presented by declines in the use of cheques by consumers;
the Corporation's dependence on a limited number of large financial
institution customers and dependence on their acceptance of new
programs; stability and growth in the real estate, mortgage and lending
markets; as well as general market conditions, including economic and
interest rate dynamics. Given these uncertainties, readers are
cautioned not to place undue reliance on such forward-looking
statements. Forward-looking statements are based on management's
current plans, estimates, projections, beliefs and opinions, and Davis
+ Henderson does not undertake any obligation to update forward-looking
statements should assumptions related to these plans, estimates,
projections, beliefs and opinions change except as required by
applicable securities laws.
