News

03.08.2006

Avion Group announces CND$ 574 million bid to acquire Atlas Cold Storage Income Trust

Avion Group HF (ICEX: AVION) (“Avion Group”), an Iceland-based investment company specializing in air, land and sea transportation solutions worldwide, today announced its intention to make a takeover bid to acquire all of the outstanding trust units (the “Units”) of Atlas Cold Storage Income Trust (TSX: FZR.UN) (the “Trust”) at a price of CDN$7.00 cash per Unit. The aggregate acquisition cost, including assumed debt of the Trust, will be CDN$574 million. The offer will be made through Eimskip Atlas Canada, Inc. a whollyowned subsidiary of Avion Group’s logistics subsidiary, Eimskipafelag Islands EHF (“Eimskip”), a leading provider of temperature controlled transportation and logistics services.

"Our offer represents an attractive valuation to the unitholders of Atlas Cold Storage. We believe it is a full and fair offer.” said Magnus Thorsteinsson, Executive Chairman of Avion Group. “We have looked at a number of acquisition opportunities across North America and while there are several options available to us, it is our current intention to pursue this transaction seeking to integrate Atlas with Eimskip, our temperature controlled transportation and logistics subsidiary.”

The offer price represents a 10.6x EBITDA multiple based on the Trust’s results over the twelve months ended March 31, 2006. In addition, the offer equates to approximately a 12% premium over the closing price of the Units on the TSX on August 2, 2006.

“Avion Group has a track record of making disciplined acquisitions and successfully integrating them with existing operations. We have applied that same disciplined approach in evaluating Atlas Cold Storage and we are confident in our ability to integrate its operations with those of Eimskip,” said Baldur Gudnason, CEO of Eimskip. Upon successful completion of the transaction, the Trust would be operated as a wholly-owned subsidiary of Eimskip.

Eimskip currently has one of the largest cold storage distribution networks in Europe with over 40 facilities. The combined operations of Eimskip and Atlas Cold Storage Income Trust will create a network of more than 90 temperature controlled facilities around the world. This transaction will provide broader customer reach for both companies and greater diversification of product offering. Eimskip has significant consolidation experience, having recently acquired and integrated temperature controlled storage facilities in the Netherlands and the U.K.

In connection with the offer, Eimskip Atlas Canada, Inc. has entered into a lock-up agreement with Avion Group and KingStreet Real Estate Growth LP No.2 (“KingStreet”), each of which is providing financing to Eimskip Atlas Canada, Inc. As of August 2, 2006, Avion Group owns 6,177,000 Units or approximately 9.5% of the issued and outstanding Units (approximately 9.2% on a fully diluted basis), and KingStreet owns or controls an additional 2,845,200 Units or approximately 4.4% of the issued and outstanding Units (approximately 4.2% on a fully diluted basis). Together Avion Group and KingStreet own or control approximately 13.9% of the issued and outstanding Units (approximately 13.4% on a fully diluted basis) as of August 2, 2006.

The offer is fully financed with senior secured credit facilities underwritten and provided by RBC Capital Markets and CIBC World Markets Inc., with real estate secured financing provided by KingStreet and SITQ (a subsidiary of Caisse de dépôt et placement du Québec). The offer will otherwise only be subject to customary conditions, including: there having been deposited under the offer and not withdrawn, a number of Units which constitute not less than 66 2/3 % of the outstanding Units (on a fully diluted basis), and there having been obtained all government and regulatory approvals which Avion Group considers necessary or desirable in connection with the offer.

Unitholders of the Trust will be entitled to receive all ordinary course distributions declared and paid by the Trust (in an amount per unit per month not to exceed the distribution per unit paid in July, 2006) with a record date prior to the expiry of the offer.

Avion Group’s takeover bid will be made to unitholders of Atlas Cold Storage Income Trust following receipt of a complete unitholder list from the Trust or earlier by publication of an advertisement and filing of the takeover bid circular as required under applicable securities laws. The bid will be open for acceptance for 35 calendar days from the date of mailing or publication of an advertisement of the takeover bid, which will include full details of the offer.

Avion Group has retained CIBC World Markets Inc. and RBC Capital Markets to act as financial advisors and dealer managers and Bennett Jones LLP and Goodmans LLP to act as legal advisors.