UE Waterheater Income Fund completes $361 million initial public offering

Date Closed: 12/19/2003

Value: $361 million

UE Waterheater Income Fund completed on December 19, 2003, an initial public offering of 36.1 million units for gross proceeds of $361 million. Proceeds of the offering, together with $400 million borrowed under a credit facility provided by CIBC and TD Bank, were used to indirectly acquire the water heater rental business and certain related businesses owned by Union Energy Inc., a wholly owned subsidiary of EPCOR Utilities Inc. The fund, through its indirect holdings in Union Energy LP, now owns the second largest portfolio of rental water heaters in Canada and controls approximately 40 per cent of the water heater rental market in Ontario. On January 9, 2004, the fund raised additional gross proceeds $54.1 million upon the exercise of the over allotment option by the underwriters, bringing total gross proceeds from the offering to $415.1 million. CIBC World Markets Inc. and TD Securities Inc. were co-lead underwriters, with a syndicate that included RBC Dominion Securities Inc., Scotia Capital Inc., BMO Nesbitt Burns Inc., National Bank Financial, Canaccord Capital Corp., HSBC Securities (Canada) Inc. and Raymond James Ltd.

The fund was represented by BLG, with a team that included Frank Callaghan, Frank Allen, Joanne Poljanowski, Bill McLean, Michael De Cosimo, Adam Segal, Vinay Mehta and Emma Miller (corporate/securities), Larissa Tkachenko, Bruce Sinclair and Craig Webster (tax) and Stephen Redican, Jon Dyck, Simon Wormwell and Gus Karantzoulis (banking and structured finance).