AADCO Announces Agreement to Purchase Dominion Auto Recycling Inc.

Tuesday, Oct 31 2006, 12:00

AADCO Automotive Inc., headquartered in Brampton and the parent company of AADCO Vehicle Disposal Services Inc, a leading supplier of quality used auto parts, recently announced that it has entered into a letter of intent providing for the purchase of Jorama Holdings Inc. of Stoney Creek Ontario.

Jorama Holdings Inc. owns and operates Dominion Auto Recycling Inc., which has been a leading provider in the Golden Horseshoe Area for over 60 years with recycled auto parts and rebuilder vehicles. The purchase price will be comprised of cash, vendor-take-back financing and stock. The transaction is expected to close on or about November 15, 2006, and will be subject to regulatory approval.

Mr. Benjy Katz, the owner of Jorama Holdings and the operator of Dominion Auto Recycling Inc., will continue to run that business as a wholly owned subsidiary of AADCO Automotive Inc. As Chief Operating Officer of yard operations for AADCO Automotive Inc., he will also oversee the operations at AADCO Vehicle Disposal Services Inc.

"The purchase of Dominion Auto Recycling Inc. is just the first step in AADCO's corporate strategy to become the dominant national provider of quality used and aftermarket parts serving the automotive repair industry. The combined companies will have approximately $15 million in annual revenue initially, be profitable, with positive cash flows further strengthened by effective use of historic tax losses," said Charles Hodgkinson, President and CEO of AADCO Automotive Inc. "We are partnering with an established, long-standing business, with exceptional management talent in Benjy Katz, who shares our vision of the marketplace opportunities." Added Mr. Katz, "this is a unique opportunity to build upon the foundations that my family has laid over the past three generations. Through this consolidation not only will we be able to serve our customers better as they become multipoint operators, but we will be able to generate superior operating efficiencies and a broader operating scale. We believe the synergies will have a substantial impact on our corporate bottom line both in the short and long term, and bring a multitude of growth opportunities for us to advantage."