Colabor Income Fund Acquires Summit Food Service Distributors' Assets

On January 8, 2007 Colabor Income Fund (the fund), through Colabor Limited Partnership (Colabor), completed the acquisition of substantially all the assets of Summit Food Service Distributors Inc., one of Canada's largest distributors to the food service industry, a subsidiary of Cara Operations Limited. The total consideration for the acquisition was $115 million, plus the assumption of certain liabilities.

Concurrent with the acquisition, Colabor entered into a 10-year distribution agreement with Cara to service all Cara brands within Ontario and Quebec. Cara's brands include Swiss Chalet, Harvey's, Kelsey's Neighbourhood Bar and Grill, Montana's Cookhouse and Milestone's Grill and Bar.

In connection with the acquisition, the fund completed on January 4, 2007 a $25 million offering of 2,825,000 subscription receipts at a price of $8.85 per subscription receipt and $50 million aggregate principal amount of 7.0 per cent extendible convertible unsecured subordinated debentures for aggregate gross proceeds of $75 million. The offering was underwritten on a bought deal basis by a syndicate led by National Bank Financial Inc. and Scotia Capital Inc., which also included Canaccord Capital Corporation, Desjardins Securities Inc. and HSBC Securities Canada Inc.

Summit also acquired, on a private placement basis concurrently with the closing of the acquisition, 1,130,000 units of the fund for the consideration of $10 million. On January 26, 2007, the underwriters of the offering exercised partially their over-allotment option to purchase 120,000 additional units at a purchase price of $8.85 per unit, for gross proceeds of $1,062,000 in relation to its offering.

Also, in the context of the acquisition, a $70 million operating credit facility for Colabor was arranged with National Bank of Canada, as underwriter and administrative agent, and National Bank Financial Inc., as lead arranger and sole bookrunner.

The fund was represented by its corporate secretary, Claude Picard from Bélanger Sauvé Avocats, and a team from McCarthy Tétrault LLP led by Philippe Leclerc. The McCarthy Tétrault team included Frédéric Cotnoir, Mathieu Laflamme and Philippe Fortier (securities); Pierre Laflamme and Frédéric Harvey (tax); Madeleine Renaud and Dominic Thérien (competition); Lorraine Allard (pension) and François Ouellette (translation).

Summit and Cara were represented by Ian Wilkie, Cara's senior vice president, general counsel and corporate secretary, and Darrell Jarvis, vice president, associate general counsel of Cara, and assisted by a team from Osler, Hoskin & Harcourt LLP that included John Groenewegen and Andrew Peel (M&A); Tony Devir (pensions); Jack Cook (real estate); Joyce Bernasek (financial services); and Michelle Lally and Kevin Ackhurst (competition).

The underwriters were represented by a team from Fasken Martineau DuMoulin LLP, which was comprised of Robert Paré, Jean-Pierre Chamberland, Mireille Tremblay, Gabriel Castiglio, Sébastien Hébert (securities); Gilles Carli and Thomas Copeland (tax). National Bank of Canada was also represented by a team from Fasken Martineau DuMoulin LLP comprised of Andrew Klug, Marc Novello and Félix Gutierrez.