Wajax's Income Fund Conversion
Wajax Limited, Toronto, CA, a publicly traded distributor on the Toronto Stock Exchange, plans to convert the company into an income fund, where current shareholders will exchange their common shares for units in the new income trust fund. The rationale is that the income fund structure will create higher value units than Wajax's common shares, based in part on its low ongoing capital requirements relative to the company's ability to generate cash flow.
Wajax has three core distribution businesses in mobile equipment and after-sale parts, diesel engines and industrial power transmission and fluid power components. Wajax reported annual sales of C$928.2 million, with about a third of sales from its industrial components group, which includes Kinecor in Canada (C$253 million) ...