Attention Business/Financial Editors:
AADCO Announces Agreement to Purchase Dominion Auto Recycling Inc.
AADCO Automotive Inc. (AA: TSX - Venture Exchange)
BRAMPTON, ON, Sept. 22 /CNW/ - AADCO Automotive Inc. (the "Company"), the parent company of AADCO Vehicle Disposal Services Inc, a leading supplier of quality (LKQ) used auto parts, announces that it has entered into a letter of intent providing for the purchase of Jorama Holdings Inc. of Stoney Creek Ontario.
Jorama Holdings Inc. owns and operates Dominion Auto Recycling Inc., which has been a leading provider in the Golden Horseshoe Area for over 60 years with recycled auto parts and rebuilder vehicles. The purchase price will be comprised of cash, vendor-take-back financing and stock. The transaction is expected to close on or about November 15, 2006, and will be subject to regulatory approval.
Mr. Benjy Katz, the owner of Jorama Holdings and the operator of Dominion Auto Recycling Inc., will continue to run that business as a wholly owned subsidiary of AADCO Automotive Inc. As Chief Operating Officer of yard operations for AADCO Automotive Inc., he will also oversee the operations at AADCO Vehicle Disposal Services Inc.
"The purchase of Dominion Auto Recycling Inc. is just the first step in AADCO's corporate strategy to become the dominant national provider of LKQ (used) and aftermarket parts serving the automotive repair industry. The combined companies will have approximately $15 million in annual revenue initially, be profitable, with positive cash flows further strengthened by effective use of historic tax losses," said Charles Hodgkinson, President and CEO of AADCO Automotive Inc. "We are partnering with an established, long-standing business, with exceptional management talent in Benjy Katz, who shares our vision of the marketplace opportunities." Added Mr. Katz, "this is a unique opportunity to build upon the foundations that my family has laid over the past three generations. Through this consolidation not only will we be able to serve our customers better as they become multipoint operators, but we will be able to generate superior operating efficiencies and a broader operating scale. We believe the synergies will have a substantial impact on our corporate bottom line both in the short and long term, and bring a multitude of growth opportunities for us to advantage."
About AADCO
AADCO Automotive Inc. is a rapidly growing, Canadian public company committed to providing quality LKQ (used) and Aftermarket parts to the automotive repair industry with the goal of becoming the national provider of these parts through acquisition and organic growth.
The TSX - Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
This press release includes forward-looking statements, including statements relating to the Company's marketing strategy, future sales growth, profitability, competitive position, and release of new products. The words "plan", "expect", "believe", "intend", "anticipate", "forecast", "target", "estimate" and similar expressions identify forward-looking statements. Forward-looking statements are based on assumptions made by and information currently available to the Company. Investors are cautioned that these forward-looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected. The Company does not undertake to review or update these forward-looking statements.
For further information: AADCO Automotive Inc., (905) 789-9313, Charles Hodgkinson, CEO, chodgkinson@aadco.ca
