December 23, 2010

Davis + Henderson to purchase ASSET Inc for $76 million in cash

TORONTO--Davis + Henderson, Limited Partnership, a wholly-owned business of Davis + Henderson Income Fund is going to acquire substantially all the assets of ASSET Inc.for $76 million payable in cash. The acquisition is expected to close on or about January 18, 2011, subject to satisfaction of customary closing conditions.

ASSET is Canada's largest provider of technology based asset recovery and insolvency management solutions to the Canadian financial services industry. ASSET uses web-enabled platforms to manage, on behalf of lenders, the recovery process around loans provided for moveable property such as cars, trucks, boats and recreational vehicles. ASSET also provides solutions to support real property recovery, unsecured debt recovery, insolvency process management, and personal property lien search and registration services. Headquartered in Toronto, Ontario, ASSET employs approximately 240 people across the country. Blair Franklin Capital Partners Inc. acted as financial advisor to ASSET Inc. in this transaction.

Total annual revenues from the organization are expected to be less than 10% of D+H's consolidated annualized revenues. While specific financial terms of the acquisition were not disclosed, the addition of ASSET is expected to provide accretion for D+H shareholders in 2011.

By acquiring ASSET, D+H furthers its strategy of being a leading provider of integrated solutions to the financial services industry. D+H and ASSET serve substantially the same customers, including all of Canada's leading financial institutions, across different parts of the lending value chain. Bob Cronin, CEO of D+H said, "Our acquisition of ASSET advances our objective of delivering an increasingly broad range of end-to-end lending solutions to our customers. We currently have several leading offerings related to the lending area, including technology for loan origination and underwriting, as well as certain loan servicing solutions, and with this acquisition we further deepen our capabilities across the broader lending spectrum."

This acquisition also advances D+H's strategic objective of diversifying revenues and cash flows. As well, the addition of ASSET is expected to provide some additional stability to revenue as its business tends to be economically counter-cyclical to certain other D+H service areas where volumes and revenues generally move directionally with the economy.

Added Gerrard Schmid, President and COO of D+H, "ASSET has a solid reputation as a company that delivers value for its customers and we are very pleased to be adding this strong group of experienced and knowledgeable people to D+H. Working together, we believe we can grow and enhance these market-leading solutions."

D+H expects to fund the acquisition by drawing upon an extension of its existing credit facilities. D+H has a commitment from its existing lending syndicate to make available additional credit that would be drawn from both a revolving and term component of the extended facility.