/NOT FOR DISTRIBUTION TO THE UNITED STATES NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES/
Toronto Stock Exchange AW.UN
VANCOUVER, March 2 /CNW/ - A&W Revenue Royalties Income Fund (the "Fund") and A&W Food Services of Canada Inc. ("Food Services") announced today that Food Services has completed a secondary bought deal offering of units of the Fund (the "Offering") in connection with an agreement with a syndicate of underwriters led by CIBC and National Bank Financial Inc. and including BMO Capital Markets, RBC Capital Markets, Scotia Capital Inc., TD Securities Inc., Canaccord Genuity Corp., HSBC Securities (Canada) Inc. and Raymond James Ltd. (collectively, the "Underwriters"). The Underwriters purchased 2,997,000 units of the Fund ("Units") from Food Services at a purchase price of $23.35 per Unit for gross proceeds of $69,979,950. The Fund did not receive any proceeds of the Offering. Food Services paid the expenses of the Offering.
Prior to the closing of the Offering, Food Services owned securities indirectly exchangeable for 4,247,358 Units (the "Exchangeable Securities"), representing approximately a 34% indirect interest in the Fund. Food Services only exchanged the number of Exchangeable Securities needed for the number of Units to be sold pursuant to the Offering. Following the closing of the Offering, Food Services now owns Exchangeable Securities indirectly exchangeable for 1,250,358 Units, or approximately a 10% indirect interest in the Fund.
There is no change in the total number of equivalent Units outstanding and no change in the amount of cash available to pay distributions as a result of the Offering. The regular monthly distribution will remain at 11.7 cents per month per Unit. The first distribution that purchasers of the Units acquired under the Offering will be entitled to receive is the distribution expected to be paid on March 31, 2011 to unitholders of record on March 15, 2011.
Food Services has today declared a dividend in the aggregate amount of $62,730,000 to its shareholder of record on March 9, 2011.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States. The securities have not been registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold within the United States, absent such registration or an applicable exemption from such registration requirements.
About the Fund
The Fund is a limited purpose trust established to invest in A&W Trade Marks Inc. ("TMI"), which through its interest in the A&W Trade Marks Limited Partnership (the "Partnership"), owns the A&W trade-marks used in the A&W quick service restaurant business in Canada. The A&W trade-marks comprise some of the best-known brand names in the Canadian foodservice industry. In return for licensing Food Services to use its trade-marks, TMI (through the Partnership) received royalties equal to 3% of the sales A&W restaurants in the Royalty Pool. Food Services is the second largest quick service hamburger restaurant chain in Canada. Operating coast-to-coast, A&W restaurants feature famous trade-marked menu items such as The Burger Family, Chubby Chicken and A&W Root Beer.
The Royalty Pool is adjusted annually to reflect sales from new A&W restaurants, net of the sales of any A&W restaurants that have permanently closed. Additional limited partnership units are issued to Food Services to reflect the annual adjustment. Food Services' additional limited partnership units are exchangeable for additional non-voting common shares of TMI which shares are exchangeable for Units of the Fund.
TMI's dividends to the Fund and to Food Services, and the Fund's distributions to unitholders are based on top-line revenues of the A&W restaurants in the Royalty Pool, less interest, general and administrative expenses and current income taxes of TMI, and are thereby isolated from many of the factors that impact an operating business.
Certain statements in this report may be forward-looking in nature. Actual results may differ materially from those expressed or implied in these forward-looking statements. The forward-looking statements are based on assumptions that management considered reasonable at the time they were prepared. These forward-looking statements are subject to a number of risk factors, including general economic and business conditions, unemployment, harmonization of sales taxes, financial and political instability, changes in income tax laws or their application to the Fund and other factors disclosed previously and from time to time in the Fund's public filings. Forward-looking information is provided as of the date hereof and, except as required by law, we assume no obligation to update or revise forward-looking information to reflect new events or circumstances.
Don Leslie, Chief Financial Officer: (604) 988-2141 or email@example.com