K-Bro Linen Inc. Announces $25 Million Equity Offering

EDMONTON, ALBERTA--(Marketwired - Nov. 18, 2014) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

K-Bro Linen Inc. ("K-Bro") (TSX:KBL) announced today that it has entered into an agreement to sell 610,000 common shares ("Shares") on a bought deal basis at a price of $41.50 per Share to a syndicate of underwriters led by TD Securities Inc. for gross proceeds of $25,315,000. In addition, K-Bro has granted the syndicate an over-allotment option, exercisable for a period of 30 days following closing of the offering, to purchase up to an additional 91,500 Shares which, if exercised, would increase the gross offering size to $29,112,250, to cover over-allotments, if any, and for market stabilization purposes. The offering is expected to close on or about December 9, 2014, and is subject to the approval of securities regulatory authorities.

The net proceeds from the offering will be used to repay indebtedness, fund development at the Company's Regina facility and for general corporate purposes.

The offering is being made in all provinces and territories of Canada and a preliminary short form prospectus will be filed no later than November 24, 2014 with the securities regulatory authorities in all provinces and territories of Canada. No securities regulatory authority has either approved or disapproved of the contents of this news release.

This press release is not an offer of securities for sale in the United States. The Shares being offered have not been and will not be registered under the United States Securities Act of 1933 and accordingly are not being offered for sale and may not be offered, sold or delivered, directly or indirectly within the United States, its possessions and other areas subject to its jurisdiction or to, or for the account or for the benefit of a U.S. person, except pursuant to an exemption from the registration requirements of that Act.

CORPORATE PROFILE

K-Bro is the largest owner and operator of laundry and linen processing facilities in Canada. K-Bro provides a comprehensive range of general linen and operating room linen processing, management and distribution services to healthcare institutions, hotels and other commercial accounts. K-Bro currently operates eight processing facilities under three distinctive brands, including K-Bro Linen Systems Inc., Buanderie HMR and Les Buanderies Dextraze, in seven Canadian cities: Québec City, Montréal, Toronto, Edmonton, Calgary, Vancouver and Victoria.

Additional information regarding the Corporation including required securities filings are available on our website at www.k-brolinen.com and on the Canadian Securities Administrators' website at www.sedar.com; the System for Electronic Document Analysis and Retrieval ("SEDAR").

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking information that represents internal expectations, estimates or beliefs concerning, among other things, future activities or future operating results and various components thereof. The use of any of the words "anticipate", "continue", "expect", "may", "will", "project", "should", "believe", and similar expressions suggesting future outcomes or events are intended to identify forward-looking information. Statements regarding such forward-looking information reflect management's current beliefs and are based on information currently available to management.

These statements are not guarantees of future performance and are based on management's estimates and assumptions that are subject to inherent risks and uncertainties, which could cause K-Bro's actual performance and financial results in future periods to differ materially from the forward-looking information contained in this news release. These risks and uncertainties include, among other things, (i) risks associated with acquisitions, including the possibility of undisclosed material liabilities; (ii) K-Bro's competitive environment; (iii) utility and labour costs; (iv) K-Bro's dependence on long-term contracts with the associated renewal risk, (v) increased capital expenditure requirements; (vi) reliance on key personnel; and (vii) the availability of future financing. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information include: (i) volumes and pricing assumptions; (ii) utility costs; (iii) expected impact of labour cost initiatives; and (iv) the level of capital expenditures. Although the forward-looking information contained in this news release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Certain statements regarding forward-looking information included in this news release may be considered "financial outlook" for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this news release.

All forward-looking information in this news release is qualified by these cautionary statements. Forward-looking information in this news release is presented only as of the date made. Except as required by law, K-Bro disclaims any intention or obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.