E.D. Smith Income Fund Acquires Assets of Seaforth Creamery and Completes Debt Arrangements and $60M Treasury Offering

On June 5, 2006, E.D. Smith Income Fund, an income trust trading on the Toronto Stock Exchange, completed its indirect acquisition of the assets of Seaforth Creamery Inc. The combined businesses create the dominant North American producer in the private label pourable salad dressing category.
E.D. Smith Limited Partnership paid $95.2 million in cash and securities exchangeable for units of the fund and agreed to make an additional payment conditional upon the achievement of pre-determined thresholds of 2006 adjusted EBITDA.
The fund also closed a treasury offering of 7.5 million subscription receipts representing the right to receive units of the fund for gross proceeds of $60 million. The net proceeds of such offering were used, in part, to fund the Seaforth acquisition.
Since the Seaforth acquisition closed on the same date as the closing of the offering, the fund delivered units, instead of subscription receipts, to investors on the closing of the offering.
The offering was underwritten by a syndicate led by BMO Nesbitt Burns Inc. that also included CIBC World Markets Inc., RBC Dominion Securities Inc., Scotia Capital Inc., TD Securities Inc., Genuity Capital Markets G.P., Clarus Securities Inc. and Canaccord Capital Corporation. The fund also entered into new debt arrangements with the Bank of Montreal.
The fund was represented by Cassels Brock & Blackwell LLP with a team led by Maxwell Gotlieb that included Bruce McNeely, Sheldon Plener and Peter Bouzalas (business law); Andrea FitzGerald, John Vettese, Lori Prokopich, Patrick Gleeson and Jay King (securities); Kenneth Yolles and Tom Kapsales (real estate); James Ayres (environmental); Mark Nicholson (competition); Catherine Dennis (IP); John O'Reilly (employment) and Tilly Gray (financial services).
Seaforth was represented by Davies Ward Phillips & Vineberg LLP with a team that included Jay A. Swartz, Philippe C. Rousseau, Steven Harris and Fiona Fitzpatrick (corporate law) and Brian Clark (real estate). The underwriters were represented by McCarthy Tétrault LLP with a team that included Jonathan Grant, Robert Hansen and Domenic Di Sisto (securities); James Morand (tax); Joanna Rosengarten (environmental); Ian Bies and Jeanette Lee (IP) and Jamie Orzech (real property). Bank of Montreal was represented by Fraser Milner Casgrain LLP with a team that included Tom Hunter and Le Nguyen (financial services).