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| | Fri Jan 28, 2005
News Release Boyd Group Acquires Auto Glass Repair Network
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| | Winnipeg, Manitoba -- January 28, 2005 -- Boyd Group Income Fund (TSX: BYD.UN) ("Boyd Group" or the "Fund") today announced that it has acquired the assets of the Glass Network Division of Globe-Amerada Glass Company (the "Globe Network"). The Globe Network is an auto glass repair and replacement referral business with affiliated service providers throughout the United States. Boyd Group will fund the acquisition through a combination of cash, Fund units, supplier loans and a five-year note held by the Globe-Amerada Glass Company. Annual revenues for the Globe Network were approximately $12.5 million for 2004. The acquisition is expected to make an immediate positive contribution to the Fund's distributable cash.
"This acquisition is an excellent strategic fit for us and represents a significant opportunity to increase our distributable cash going forward. We plan to integrate the Globe Network into our U.S. based Gerber Collision & Glass head office to realize cost synergies, while leveraging our strategic industry relationships to drive future growth," said Terry Smith, President and CEO of the Boyd Group. "We view auto glass repair and replacement services as a complementary growth driver for our business. Though we provide auto glass repair and replacement services in our Canadian locations as well as our Gerber Collision & Glass facilities in Illinois, we do not currently offer auto glass services in the balance of our U.S. locations. Through the Globe Network, we will refer network repairs to Boyd Group facilities, thereby providing us with an opportunity to quickly and profitably introduce auto glass repair and replacement services to the balance of our U.S. locations."
Founded in 1976, the Globe Network is the oldest auto glass repair and replacement referral network in the U.S. Utilizing a company owned and operated call centre located in Chicago, Illinois, the Globe Network facilitates auto glass repair and replacement services across the U.S. through a network of independently owned businesses comprised of approximately 7,000 locations nationwide. The Globe Network targets insurance companies and the commercial (fleet leasing) segment of the auto glass industry.
The U.S. auto glass repair industry generates approximately $5.0 billion in annual revenue. The industry is comprised of three major customer segments: i) automobile insurance; ii) commercial; and iii) consumer. Automobile insurance accounts for approximately 75% of the industry's total revenue and the majority of this segment's revenues come through network referrals.
Senior management of the Globe Network, including Mr. John Kellman, President, and Mr. Michael Kellman, Senior Vice President, have been retained by the Boyd Group to manage the Globe Network's activities and will report directly to Mr. Eddie Cheskis, CEO of Boyd Group's Gerber Collision & Glass division. Mr. Cheskis, who has extensive business experience in the auto glass repair industry, is the former President of the USA Glass Network.
"This acquisition provides us with tremendous upside," said Eddie Cheskis, CEO of Gerber Collision & Glass. "Combining the Globe Network's track record of outstanding customer service with Boyd and Gerber's strength in providing insurance companies with superior collision repair claims management solutions, post acquisition, we will embark on a focused growth plan, with a mandate to significantly grow the Globe Network's share of market."
Gerber Collision & Glass, which has been dedicated to a philosophy of providing quality repairs and service to insurance companies and their customers since 1937, was acquired by Boyd Group in February 2004. In the second quarter of 2004, Boyd Group initiated the roll-out of Gerber Collision & Glass as its brand for all of its collision repair centres in the U.S. As Boyd Group continues to expand its network of Gerber Collision & Glass repair facilities in select regions throughout the U.S., it intends to grow its auto glass repair business proportionately.
About Boyd Group Income Fund Boyd
Group Income Fund is an unincorporated, open-ended mutual fund trust created for the purposes of acquiring and holding certain investments, including a majority interest in The Boyd Group Inc. and its subsidiaries. Boyd Group Income Fund's policy is to pay monthly distributions to unit holders of record on or around the last business day of the month.
About The Boyd Group Inc.
The Boyd Group Inc. is the largest operator of collision repair centres in Canada and among the largest in North America. The company operates locations in the four western Canadian provinces principally under the trade name Boyd Autobody & Glass and in six U.S. states principally under the trade name Gerber Collision & Glass. The Boyd Group Inc. is focused on its plan to be a leader in the consolidation of the highly fragmented North American collision repair industry, recently estimated to generate approximately $40 billion in revenue annually. For more information on The Boyd Group Inc. or Boyd Group Income Fund, please visit our Web site at www.boydgroup.com.
For further information, please contact:
Terry Smith
President & CEO
Tel: (204) 895-1244
terry.smith@boydgroup.com
Bruce Wigle
Investor Relations
Tel: (416) 815-0700 (ext .228)
bwigle@equicomgroup.com
This press release contains forward-looking statements, other than historical facts, which reflect the view of the Fund's management with respect to future events. Such forward-looking statements reflect the current views of the Fund's management and are made on the basis of information currently available. Although management believes that its expectations are reasonable, it can give no assurance that such expectations will prove to be correct. The forward-looking statements contained herein are subject to these factors and other risks, uncertainties and assumptions relating to the operations, results of operations and financial position of the Fund. The Fund assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those contemplated by the forward-looking statements. |
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