UE Waterheater Income Fund Completes IPO

UE Waterheater Income Fund completed on December 19, 2003, an initial public offering of 36.1 million units for gross proceeds of $361 million. Proceeds of the offering, together with $400 million borrowed under a credit facility provided by CIBC and TD Bank, were used to indirectly acquire the water heater rental business and certain related businesses owned by Union Energy Inc., a wholly owned subsidiary of EPCOR Utilities Inc. The fund, through its indirect holdings in Union Energy LP, now owns the second largest portfolio of rental water heaters in Canada and controls approximately 40 per cent of the water heater rental market in Ontario.

On January 9, 2004, the fund raised additional gross proceeds $54.1 million upon the exercise of the over allotment option by the underwriters, bringing total gross proceeds from the offering to $415.1 million. CIBC World Markets Inc. and TD Securities Inc. were co-lead underwriters, with a syndicate that included RBC Dominion Securities Inc., Scotia Capital Inc., BMO Nesbitt Burns Inc., National Bank Financial, Canaccord Capital Corp., HSBC Securities (Canada) Inc. and Raymond James Ltd.

The fund was represented by Borden Ladner Gervais LLP, with a team that included Frank Callaghan, Frank Allen, Joanne Poljanowski, Bill McLean, Michael De Cosimo, Adam Segal, Vinay Mehta and Emma Miller (corporate/securities), Larissa Tkachenko, Bruce Sinclair and Craig Webster (tax) and Stephen Redican, Jon Dyck, Simon Wormwell and Gus Karantzoulis (banking and structured finance); and by Barry Zalmanowitz, Q.C. (competition) of Fraser Milner Casgrain LLP.

The underwriters were represented by Torys LLP, with a team that included James Scarlett, Adam Armstrong, Rena Shadowitz, Shiraz Gheyara and Jim Hong (corporate/securities), Corrado Cardarelli, Ron Nobrega and Timothy Rorabeck (tax) and Simon Archer and Mitch Frazer (pension and employment). The lenders were represented by McCarthy Tétrault LLP, with a team that included Stephen Furlan, Barry Ryan, Justin Lapedus and Suzanne Murphy (financial services), Barbara Boake (bankruptcy and restructuring) and Jerald Wortsman (tax).

Lawyer(s)

Mitch Frazer Stephen J. Redican Simon B. Archer Barbara J. Boake Ronald E. Nobrega Adam S. Armstrong Adam Segal Simon A. Wormwell Timothy P. Rorabeck Suzanne V. Murphy Francis R. Allen Jerald M. Wortsman Justin A. Lapedus Larissa V. Tkachenko Bruce R. Sinclair Vinay Mehta Jonathan F. Dyck William R. McLean Barry Zalmanowitz Craig J. Webster Gus Karantzoulis Michael C. De Cosimo Rena Shadowitz Jim Hong James D. Scarlett Corrado Cardarelli Stephen Furlan