GENIVAR Income Fund Announces Agreement to Convert to a Corporation

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MONTREAL, April 16 /CNW Telbec/ - GENIVAR Income Fund (TSX:GNV.UN) (the "Fund") today announced that it has entered into an agreement to convert from an income trust structure to a publicly-traded corporation on or about January 1, 2011 (the "Arrangement").

In order to effect the conversion, the Fund has signed a definitive agreement (the "Arrangement Agreement") with GENIVAR Inc., to combine and form a new, publicly-traded corporation. GENIVAR Inc. is the holding corporation through which its shareholders, all of which are employees of the Fund's subsidiaries, hold an indirect interest of 33.35% in the Fund. The new corporation will be named GENIVAR Inc. ("New GENIVAR") and the Fund has filed an application with the Toronto Stock Exchange (the "TSX") for the listing of the common shares of New GENIVAR on the TSX under the symbol "GNV" upon completion of the Arrangement.

The Arrangement will occur pursuant to a statutory plan of arrangement under Section 192 of the Canada Business Corporation Act. The details of the Arrangement are further described in the Notice of Annual and Special Meeting of Unitholders and the Management Information Circular to be sent to voting unitholders at the end of April 2010, in connection with the conversion and other matters to be considered at the annual and special meeting (the "Meeting") of unitholders to be held on May 27, 2010.

"The Fund believes that this arrangement will simplify the business structure and will provide greater flexibility to continue growing its business," said Pierre Shoiry, President and CEO of the Fund. "Since it became public as an income trust in May 2006, the Fund concluded 42 acquisitions and expanded significantly its geographic reach nationally and abroad to become a leader in the engineering services business in Canada. The Fund grew its revenue and EBITDA from respectively $176 million to $478 million and from $26 million to $79 million, from fiscal year 2006 to fiscal year 2009. As a corporation, we intend to pursue our growth strategy in Canada and internationally and reach another milestone of our leadership. New GENIVAR will be managed by the same experienced team of professionals that have demonstrated their ability to efficiently manage our operations," added Mr. Shoiry.

Pursuant to the Arrangement, unitholders of the Fund (the "Unitholders") will receive, for each unit of the Fund held, one share of New GENIVAR and the shareholders of GENIVAR Inc. will receive, for each common share of GENIVAR Inc. held immediately prior to the effective time of the Arrangement, 0.8929 common share of New GENIVAR.

On completion of the Arrangement, the shareholders of GENIVAR Inc. are anticipated to own in the aggregate approximately 30.89% of New GENIVAR (with no individual shareholder of GENIVAR Inc. expected to own more than 5% of New GENIVAR) and the Unitholders are anticipated to own in the aggregate approximately 69.11% of New GENIVAR. The aggregate ownership percentages of each of the shareholders of GENIVAR Inc. and Unitholders will be adjusted depending on the adjusted net value of GENIVAR Inc. as of December 31, 2010. It is not expected that any such adjustment will be material to the aggregate ownership percentage of New GENIVAR by Unitholders.

The Unitholders will vote on the Arrangement at the Meeting that will take place at the McCord Museum (J. Armand Bombardier Hall), at 690 Sherbrooke Street West, Montreal, Quebec, on May 27, 2010 at 10:00 a.m. (Eastern time). The record date for determining Unitholders entitled to vote on the Arrangement is April 20, 2010.

The Arrangement is subject to, among other customary conditions, approval by the Superior Court of Québec, the approval of the TSX, a positive vote in favour of the Arrangement by at least 66 2/3% of the votes cast by the holders of the Fund's voting units and by a simple majority of the votes cast by disinterested Unitholders, either in person or by proxy, voting at the Meeting and a positive vote in favour of the Arrangement by at least 66 2/3% of the votes cast by shareholders of GENIVAR Inc. at a meeting to be held immediately prior to the Meeting.

The special committee of the board of trustees of the Fund has received a formal valuation of the Units and the consideration to be received by Unitholders pursuant to the Arrangement prepared by KPMG LLP (the "Valuation"). Blair Franklin Capital Partners Inc. has provided to the board of trustees of Fund a fairness opinion providing that the consideration to be offered to the Unitholders pursuant to the Arrangement is fair, from a financial point of view, to disinterested Unitholders (the "Fairness Opinion"). The Fund also retained BMO Nesbitt Burns Inc. as financial and strategic advisor to provide strategic advice and guidelines to the Fund in respect of the Arrangement.

It is also expected that the shareholders of GENIVAR Inc. will enter into lock-up agreements with New GENIVAR pursuant to which such shareholders will agree not to sell, transfer or otherwise dispose of their common shares of New GENIVAR to be received pursuant to the Arrangement for a certain period of time following the effective date of the Arrangement.

The board of trustees of the Fund, based upon its own investigations and deliberations, including its consideration of the Valuation and the Fairness Opinion, has unanimously concluded that the Arrangement is fair to disinterested Unitholders and is in the best interests of the Fund and its disinterested Unitholders, and recommends that disinterested Unitholders vote in favour of the Arrangement.

Unitholders are expected to receive their regular monthly cash distribution of $0.125 per unit, subject to any additional special distributions as determined by the Board, until the effective date of the arrangement. The last distribution payment is expected to be made on January 17, 2011 to unitholders of record on December 31, 2010.

If the Arrangement is approved at the Meeting and the effective date of the Arrangement occurs on or about January 1, 2011, as currently scheduled, it is anticipated that New GENIVAR will adopt a dividend policy whereby it will initially pay a quarterly dividend of $0.375 ($1.50 per annum) per share of New GENIVAR. Provided the Arrangement is approved by Unitholders at the Meeting, the first quarterly dividend is anticipated to be declared in respect of the quarter ended March 31, 2011 and paid on or about April 15, 2011.

Any decisions to pay dividends on the common shares of New GENIVAR will be made by the board of directors of New GENIVAR based on, among other things, New GENIVAR's earnings, financial requirements for New GENIVAR's operations, the satisfaction of applicable solvency tests for the declaration and payment of dividends and other conditions existing from time to time. As such, the board of directors of New GENIVAR will have the entire discretion to modify the dividend policy from time to time. As a result, no assurance can be given as to whether New GENIVAR will pay dividends, or the frequency or amount of any such dividend.

"It is expected that New GENIVAR will have the ability to maintain a healthy yield for investors and continue to grow the business as it has demonstrated in the past 4 years," mentioned Daniel Fournier, Chairman of the Board of Trustees. "Moreover, we expect to enter into lock-up agreements with the shareholders of GENIVAR Inc. and, subject to the approval of the Unitholders and the shareholders of GENIVAR Inc., we have approved the implementation of long-term incentive plan within New GENIVAR to make sure that the continued interests of the partners are fully aligned with the new company", concluded Mr. Fournier.

About GENIVAR

GENIVAR is a leading Canadian engineering services firm providing private and public sector clients with a full range of professional consulting services through all execution phases of a project including planning, design, construction and maintenance. Its clients, which are of varying sizes, fall into various market segments such as buildings, industrial and energy, municipal infrastructure, transportation and environment. GENIVAR is one of the largest engineering services firm in Canada in terms of number of employees with more than 4,100 managers, professionals, technicians and technologists and support staff in over 80 locations in Canada and abroad. www.genivar.com

Non-GAAP Measures

The Funds uses Non-GAAP measures that are used by Canadian open-ended income funds as indicators of financial performance measures which are not recognized under GAAP and may differ from similar computation as reported by other similar entities and, accordingly, may not be comparable. The Fund believes these measures are useful supplemental measures that may assist investors in assessing an investment in Units.

Non-GAAP measures used by the Fund are Net revenues, EBITDA, Distributable cash and Payout ratio.

Forward Looking Information

Certain information regarding GENIVAR, the Arrangement and New GENIVAR contained herein may constitute forward-looking statements. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although GENIVAR and New GENIVAR believe that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. GENIVAR's and New GENIVAR's forward-looking statements are expressly qualified in their entirety by this cautionary statement.

For further information: Pierre Shoiry, President and CEO, GENIVAR Income Fund, [phone], ext. 5104; Marlene Casciaro, Director of Communications, GENIVAR Income Fund, [phone], ext. 5184