News (01.06.2007)
  
Newport invests 14.75 million in further consolidation of ATM industry
Newport Partners Income Fund (TSX:NPF.UN) announced today that its operating partnership EzeeATM LP("EZEE"), Canada's second largest operator of non-financial institution automated teller machines("ATM's"), has signed a definitive agreement to acquire the Canadian ATM assets of TRM Corp. (Q:TRMM)("TRM") for approximately 14.75 million. The final purchase price is subject to adjustments upon closing which is expected to occur in January 2007. The transaction, which is EZEE's thirteenth acquisition since its founding in 2001, will add approximately 1,500 operating ATM locations to EZEE's portfolio resulting in a total of approximately 3800 locations across Canada. With representation in every province and territory, EZEE provides a fully comprehensive and bilingual program and the ATM's operated by EZEE perform over 19 million ATM transactions each year. EZEE was the first Canadian ATM business to use the e-Classics’ ATM Manager Pro system. This very sophisticated platform is recognized globally as the premier operating platform for ATM debit transaction reporting and terminal management and is the basis for most major international ISO operations.
In accordance with the terms of the transaction, Newport will invest approximately $14.75 million cash into EZEE to acquire the Canadian ATM business of TRM Corp. The addition of the TRM ATM business to EZEE is expected to improve the gross profit from operations with little increase in general and administration expenses. The cash flows from the TRM investment are expected to produce a return on invested capital of 16-20%, consistent with Newport's target return for all investments.
"This acquisition increases our installation footprint in Canada by 65 percent and solidifies our position as a leading consolidator in this industry,” noted Chris Chandler, president & CEO of EZEE. "At the same time it offers immediate benefits in terms of improved transaction margins; geographic diversification - particularly in the Ontario market; and ownership of one of the best known ATM brands in the country - Access Cash."
Following the completion of this transaction, Newport will have approximately $45 million invested in a 100 percent equity interest in EZEE. This investment represents approximately 8 percent of the Fund's total invested capital.
"Chris and his EZEE team have identified a number of areas where cost reductions and increased profit margins can be achieved from the combination of these operations," added Peter Wallace, Newport's President and CEO. "We expect this acquisition and the implementation of these initiatives to give EZEE significant earnings momentum in 2007".
About Newport
Newport is an unincorporated, open-ended trust created to hold through the Company's investment in Newport Partners Commercial trust, interests in Newport Private Yield, ("NPY") a limited partnership established under the laws of the Province of Ontario. Newport began trading on the TSX on August 8, 2005 under the symbol NPF.UN.
Newport is a leading Canadian asset manager. Newport invests i the private business asset class - a major growth engine of the Canadian economy. Our objective is to make long term equity investments in leading private businesses that have a track record of strong earnings and potential for future growth. Newport's portfolio currently consists of 17 high-quality businesses representing a diverse cross-section of the Canadian economy. Newport unit holders participate in the cash flows, growth and diversification of the portfolio through monthly distributions. Newport's management has decades of investment experience and a significant ownership position.
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