K-Bro Linen announces $30M acquisition financing

K-Bro Linen Inc.



News Release

K-BRO ANNOUNCES $30 MILLION EQUITY OFFERING

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

(TSX:KBL)

Edmonton, Canada (November 21, 2017) – K-Bro Linen Inc. (“K-Bro” or the “Corporation”) is pleased to announce that it has entered into an agreement to sell 804,000 common shares (“Shares”) on a bought deal basis at a price of $37.35 per Share to a syndicate of underwriters led by TD Securities Inc. for gross proceeds of $30,029,400 (the “Offering”). In addition, K-Bro has granted the syndicate an over-allotment option, exercisable for a period of 30 days following the closing of the Offering, to purchase up to an additional 120,600 Shares which, if exercised, would increase the gross Offering size to $34,533,810, to cover over-allotments, if any, and for market stabilization purposes.

The net proceeds from the Offering will be used to partially pay down indebtedness that will be incurred under KBro’s amended $100 million senior secured revolving credit facility to fund the previously announced acquisition of Fishers Topco Ltd. (the “Acquisition”).

Pro forma for both the offering and anticipated build-outs of the Toronto and Vancouver facilities, K-Bro’s total leverage will be below 2.5x. The amended $100 million senior secured revolving credit facility will continue to remain in place to accommodate the Corporation’s working capital requirements and for general corporate purposes, including acquisitions.

The Offering is being made in all provinces and territories of Canada and a preliminary short form prospectus will be filed no later than November 27, 2017 with the securities regulatory authorities in all provinces and territories of Canada. The Offering is expected to close on or about December 12, 2017, and is subject to the closing of the Acquisition and the approval of securities regulatory authorities. No securities regulatory authority has either approved or disapproved of the contents of this press release.

This press release is not an offer of securities for sale in the United States. The Shares being offered have not been and will not be registered under the United States Securities Act of 1933 and accordingly are not being offered for sale and may not be offered, sold or delivered, directly or indirectly within the United States, its possessions and other areas subject to its jurisdiction or to, or for the account or for the benefit of a U.S. person, except pursuant to an exemption from the registration requirements of that Act.

CORPORATE PROFILE

K-Bro is the largest owner and operator of laundry and linen processing facilities in Canada. K-Bro provides a comprehensive range of general linen and operating room linen processing, management and distribution services to healthcare institutions, hotels and other commercial accounts. K-Bro currently operates nine processing facilities and two distribution centres under three distinctive brands, including K-Bro Linen Systems Inc., Buanderie HMR and Les Buanderies Dextraze, in ten Canadian cities: Québec City, Montréal, Toronto, Regina, Saskatoon, Prince Albert, Edmonton, Calgary, Vancouver and Victoria.

Additional information regarding the Corporation including required securities filings are available on our website at www.k-brolinen.com and on the Canadian Securities Administrators’ website at www.sedar.com; the System for Electronic Document Analysis and Retrieval (“SEDAR”).