Exchange Income Corporation Completes Acquisition of Provincial Aerospace

WINNIPEG, Jan. 2, 2015 /CNW/ – Exchange Income Corporation (TSX: EIF) (“EIC” or the “Corporation”), a diversified, acquisition-oriented company announced today it has successfully closed its acquisition of Provincial Aerospace Ltd. (“PAL”), a diversified Canadian-based aerospace and aviation company. The acquisition was first announced November 12, 2014.

EIC paid a total purchase price of approximately $246 million, subject to customary post-closing adjustments, of which 5% was paid through the issuance of 523,188 common shares of EIC. The balance, or $234 million, was financed through the Corporation’s unutilized credit facility. In order to satisfy certain retention obligations arising pursuant to the acquisition of PAL, an employee benefit trust has been established pursuant to which EIC shares will be acquired. Any common shares purchased by the trust will be made or deemed to be made pursuant to EIC’s recently announced normal course issuer bid.

PAL is headquartered in St. John’s, Newfoundland & Labrador, operates three distinct businesses across the aerospace, airline and aviation services sectors:

Provincial Aerospace is a global leader in intelligence, surveillance, reconnaissance and maritime patrol aircraft operations and systems. As a vertically integrated aerospace and defense business, Provincial Aerospace designs, modifies, maintains and operates custom sensor equipped maritime patrol aircraft in Canada, the Caribbean and the Middle East;
Provincial Airlines is an independent airline that has been operating for over 40 years in Eastern Canada providing scheduled, charter and cargo services. Provincial Airlines operates 210 weekly scheduled and charter flights in Newfoundland and Labrador, Quebec, New Brunswick and Nova Scotia. In addition, Provincial Airlines operates Innu Mikun Airlines, a partnership with the Innu First Nations of Labrador, which services the coastal communities of Labrador.

PAL Aviation Services operates fixed base operations at two locations, Halifax, NS and St. John’s, NL. Additional services include aircraft refueling, ground handling and aircraft facilities.

CIBC World Markets Inc., Aikins Law and Renaissance Strategic Advisors acted for EIC. BMO Capital Markets acted as financial advisor and Dentons Canada LLP and McInnis Cooper acted as legal counsel to PAL in connection with the transaction.