Sun Gro Horticulture Income Fund (TSX:GRO.UN) has gained a foothold into Quebec following a $3.9 million acquisition of a Quebec peat moss producer.
The deal not only expands Sun Gro's presence into Quebec but it also strengthens its long-term peat supply. The acquisition includes 1,900 acres of undeveloped professional-grade peat bogs, 140 acres of retail-grade bogs and three adjacent production facilities.
Sun Gro closed its acquisition of Tourbiere Omer Belanger Inc. on August 6, paying for the company through Sun Gro's existing line of credit. The deal is expected to be accretive for the income fund beginning in 2008.
The Tourbiere acquisition is expected to add 500,000 bales of peat moss to Sun Gro's 2008 harvest and could generate roughly $4.5 million in additional sales.
The deal is Sun Gro's third acquisition for the year. In January, it acquired two growing-mix producers in California.
Sun Gro's unit price range during the past week: between $7.77 and $7.90; 52-week high: $8.77; 52-week low: $5.98.