Liquor Stores Income Fund announced today that it has closed its previously announced private placement of 1,830,000 trust units of the fund at a price of $16.40 per trust unit.
The gross proceeds of approximately $30 million will be used to fund the previously announced addition of 15 new stores, to repay existing indebtedness and for general corporate purposes, including potential future acquisitions.
RBC Capital Markets acted as lead agent for a syndicate that included TD Securities Inc., Canaccord Capital Corp., HSBC Securities (Canada) Inc. and Raymond James Ltd.
On Feb. 14, the fund announced the planned acquisition of 13 additional liquor stores in Alberta and the development of two additional stores in British Columbia. In Alberta, the fund will be acquiring all 10 of the stores operated by the Last Call Group and has completed the acquisition of three independently owned and operated stores. The Last Call Group is the fourth largest independent chain of liquor stores in Alberta. The acquisition of the Last Call Group stores is subject to customary closing conditions and regulatory approvals. The closings of the Last Call Group stores and the opening of the British Columbia stores are all scheduled to take place this month.
The total cost to the fund of the 15 additional stores will be approximately $11.1 million, not including inventory.
The fund has also previously announced that, subject to the closing of the Last Call acquisitions, it intends to increase its annual distribution by $0.075 per unit from $1 to $1.075 ($0.08958 per month), commencing with the distribution to be paid to unitholders of record on May 31. The increase in unitholder distributions is due to the continued strong financial performance of the fund’s current business and the accretive nature of the acquisitions.
The fund is an open-ended trust that holds, indirectly, securities of Liquor Stores Limited Partnership, which is Alberta’s largest liquor store operator, by number of stores, and currently operates 52 stores in Alberta and one store in British Columbia. With the addition of the 10 Last Call Group stores and the two new stores in British Columbia, this will increase to 62 stores in Alberta and three in British Columbia.
The trust units trade on the Toronto Stock Exchange under the symbol LIQ.UN.