Exchange Income Corporation to acquire Provincial Aerospace for CA$246m

Exchange Income Corporation a diversified, acquisition-oriented company has entered into an agreement to acquire all of the shares of Provincial Aerospace (“PAL”), a diversified Canadian-based aerospace and aviation company, for a combination of cash and stock totaling approximately $246m. PAL, headquartered in St. John’s, Newfoundland & Labrador, operates three distinct businesses across the aerospace, airline and aviation services sectors. Provincial Airlines is an independent airline that has been operating for over 40 years in Eastern Canada providing scheduled, charter and cargo services. PAL Aviation Services operates fixed base operations at two locations, Halifax, NS and St. John’s, NL . Additional services include aircraft refueling, ground handling and aircraft facilities. PAL operates a total of 30 aircraft across its divisions with the aerospace business operating a variety of aircraft types for its customers and the airline fleet primarily comprised of Dash 8s and Twin Otters. The acquisition is anticipated to be fully funded by the issuance of common shares to the Vendor representing approximately $12m of the purchase price and the company’s available cash resources from its currently unutilized credit facility representing approximately $234m. Post-acquisition the company remains in a solid financial position with significant capacity remaining in its committed term credit facility. Accordingly, there is no requirement for the Company to issue any additional equity to complete this acquisition.