KCP Income Fund Acquires Custom Manufacturing Division of CCL Industries

On May 17, 2005, KCP Income Fund completed the acquisition of the North American custom manufacturing division of CCL Industries Inc. for a purchase price of approximately US$215 million. Including the acquisition, KCP is one of North America’s largest custom manufacturers of consumer products in the laundry, household cleaners, over the counter medicated and health and beauty care categories for both brand name and retailer brands.

The transaction was funded in part from the proceeds of a C$100,320,000 and US$80 million public offering of units and 6.5 per cent exchangeable unsecured subordinated debentures through a syndicate of underwriters led by TD Securities Inc., and from the proceeds of a new US$130 million US credit facility entered into by the Fund with a syndicate of lenders led by the Toronto-Dominion Bank.

KCP Income Fund was represented by Goodmans LLP in connection with the M&A transaction, the public offering and the lending transaction, which also included the replacement of the Fund’s senior bank facility and a new inter-creditor arrangement with the Fund’s senior noteholders. The Goodmans team was led by Stephen Bloom (M&A), Allan Goodman (corporate/securities) and Mark Surchin (banking), and included Steve Cohen and Karen Karvat (corporate/securities), Jonathan Feldman and Hooman Tabesh (M&A), David Bish and Cicely Leemhuis (banking), Alan Bowman and Maureen Berry (tax), Tom Macdonald (real estate), Richard Annan (competition) and Susan Rowland (pensions). The Fund was represented in the US by Goodwin Procter LLP with a team that included William Whitledge (tax), Laura Hodges Taylor, Evan Jones, Jon Schneider and Yoel Kranz (corporate and banking) and Sam Richardson and A.J. Snell (real estate). Howard Morse and Robin Sampson of Drinker Biddle & Reath LLP provided advice on antitrust issues.

The underwriters for the public offering were represented in Canada and the US by Torys LLP with a team led by Phil Brown in Toronto and Richard Willoughby in New York that included Gavin Sinclair, Saro Sarmazian and Adam Armstrong (corporate/securities), Corrado Cardarelli and Shiyamala Devan-Ramdas (Canadian tax), Gary Gartner and Richard Wright (US tax), Jeffrey Gracer and Shaya Berger (US environmental), Dennis Mahony (Canadian environmental), Darien Leung (banking) and Dan Miller (US securities).

The syndicate of banks was represented by Osler, Hoskin & Harcourt LLP with a team led by Michael Matheson that included Dale Seymour and Tim Meadowcroft (banking) and Tim Schumacher (real estate), and was assisted in the US by Paul Hoffman and Suzanne Johnson of Vedder, Price, Kaufman & Kammholz, PC.

The Fund’s existing senior noteholders were represented in the US by Chapman and Cutler LLP with a team led by Neil Mann that included Charles Kolin (corporate finance) and Susan Rollins (real estate), and in Canada by McCarthy Tétrault LLP with a team led by David Woollcombe that included Justin Lapedus and Keith Lau (banking), Jerald Wortsman (tax) and Jonathan Gitlin (real estate).