TORONTO, January 5, 2012 /CNW/ — Proventure Income Fund and Cervus Equipment Corp. (TSX: CVL) announced that they have completed the previously announced sale from Proventure to Cervus of certain real estate assets that Cervus had leased from Proventure for the purposes of operating Cervus' agricultural and construction equipment dealerships for aggregate consideration equal to $25,900,000.
"Cervus' acquisition of these 14 agricultural and construction equipment dealerships is accretive and congruent with Cervus' strategy to own the properties in which it operates," said Peter Lacey, president and CEO of both Proventure and Cervus.
The Asset Disposition is one of several in a series of transactions previously announced on October 31, 2011 which, from Proventure's perspective, are necessary in order for Proventure to qualify for the REIT Exemption to the SIFT Rules under the Income Tax Act (Canada).
Additional information regarding the Asset Disposition is presented in the information circular of Proventure dated December 21, 2011, which is available on SEDAR at www.sedar.com.
As described in further detail in the Information Circular, the Assets which were sold by Proventure to Cervus included properties located in:
- Calgary, Alberta
- Claresholm, Alberta
- Coronation, Alberta
- Edmonton, Alberta
- Fort McMurray, Alberta
- Melfort, Saskatchewan
- Olds, Alberta
- Pincher Creek, Alberta
- Prince Alberta, Saskatchewan
- Ponoka, Alberta
- Rosthern, Saskatchewan
- Stettler, Alberta
- Trochu, Alberta
- Watrous, Alberta
Proventure disposed of the Assets, subject to certain post-closing adjustments to be calculated, for an aggregate consideration of $25,900,000, which was paid in the form of cash in the amount of $10,783,871 and the assumption of mortgages on the Assets in the amount of $15,116,129.
The remaining properties of Proventure include dealership locations in Cranbrook, British Columbia; Fort St. John, British Columbia; Moosomin, Saskatchewan; Red Deer, Alberta; Saskatoon, Saskatchewan; and Russell, Manitoba.
The disposition of the Assets by Proventure to Cervus was considered a "related party transaction" under applicable Canadian securities legislation and consequently disinterested unitholder approval was obtained at a meeting of Proventure unitholders held on December 21, 2011.
Proventure Income Fund is an open-ended mutual fund trust established under laws of the Province of Alberta. Proventure is in the business of owning and leasing commercial real estate. The units of Proventure Income Fund are listed on the TSX Venture Exchange and trade under the symbol "PVT.UN".
Cervus acquires and manages authorized agricultural, commercial and industrial equipment dealerships in Western Canada through 30 dealership locations in Alberta, Saskatchewan and Manitoba. Cervus holds an approximate 60% equity interest in Agriturf Limited, a New Zealand-based corporation that offers authorized John Deere equipment, parts and service in the Manawatu, Rotorua, Hawke's Bay and Taranaki regions. The primary equipment brands represented by Cervus include John Deere agricultural equipment, Bobcat and JCB construction equipment, and Clark, Sellick, Nissan and Doosan material handling equipment. The common shares of Cervus are listed on the Toronto Stock Exchange and trade under the symbol "CVL".