LAB Research Inc. Secures a $21.1 Million Financing to Support its $40 Million Canadian Expansion

LAB Research Inc. Secures a $21.1 Million Financing to Support its $40 Million Canadian Expansion


LAVAL, Qc, Jan. 31 /CNW Telbec/ - LAB Research Inc. ("LRI" or "LAB Research") ("TSX: LRI"), a Canadian based global non-clinical contract research organization, is pleased to announce that it has entered into an agreement with respect to a $21.1 million financing from National Bank of Canada Health Group ("NBC") to support its ongoing $40 million Canadian expansion expected to be completed by fall 2008.

The financing consists of a $13.7 million mortgage with a 16-year term requiring no capital repayments until March 2009, and a $7.4 million loan to finance equipment, repayable over 11 years. The remaining amount required for LAB Research's expansion will be financed through working capital. LRI plans to invest the first $24 million of the $40 million project cost in 2008. The residual $16 million will be invested for the purchase of equipment over the following three years. Other terms such as interest rates and covenants are in line with the existing $19.4 million financing secured from NBC in April 2007 for the buyback of the company's Canadian facility. Completion of the financing is subject to customary conditions including the execution of the definitive agreements. As announced previously, the expansion will result in almost doubling LAB Research's Canadian capacity (from 87,000 ft(2) to 170,000 ft(2)). The construction is expected to be completed by fall 2008 and will increase the existing vivarium rooms from 36 to 80 as well as provide significant capacity for inhalation toxicology.

"The financing will provide us with the required capital to complete the expansion of our Canadian operations in accordance with the previously announced timelines", stated Luc Mainville, President and CEO of LAB Research. "As we focus on delivering the added capacity in Canada to accelerate revenue growth in the current fiscal year, we are increasing our efforts to maximize utilization of our newly created capacity in Europe", added Mr. Mainville.

About LAB Research Inc.

LAB Research is a global non-clinical contract research organization that provides contract research services to the pharmaceutical, biotechnology, agro-chemical, petro-chemical and industrial markets. LAB Research supports the development of its customers' products from three state-of-the-art facilities located in Canada, Denmark and Hungary. LAB Research's shares trade on the TSX under the symbol "LRI", with 18.1 million shares outstanding.