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Davis + Henderson to Acquire Filogix - A Leading Provider of Mortgage and Real Estate Technology in Canada - for Approximately $212.5 Million.

Strategically Aligned Acquisition Provides Davis + Henderson with Meaningful Additional Business Platform

Attention Business Editors:

Toronto, Ontario, May 18, 2006 /CNW/ -- Davis + Henderson, Limited Partnership ("Davis + Henderson"), a wholly-owned business of Davis + Henderson Income Fund (TSX: DHF.UN), today announced it has entered into an agreement to acquire all of the outstanding shares of Filogix Holdings Inc. ("Filogix") for an aggregate purchase price of approximately $212.5 million. Closing of the acquisition is expected to occur on or about June 15, 2006 subject to the satisfaction of customary closing conditions.

Filogix is the leading provider in Canada of information and transaction technology for the residential mortgages and real estate markets. Its primary customer groups are mortgage intermediaries such as mortgage brokers and mortgage lenders' in-house sales forces (collectively, "Intermediaries"), residential mortgage lenders, and real estate agents and boards. Its mortgage networks enable Intermediaries to electronically manage customer data and to submit mortgage application information to lenders and for lenders to receive application information and to reply back to the mortgage intermediaries. Further, Filogix provides additional technology solutions for mortgage lenders to facilitate the underwriting and processing of mortgages. Additionally, Filogix delivers services to real estate boards and their agents through provision of dedicated access to multiple listing data and other related services. Its electronic platforms also connect with many other parties involved in the real estate and mortgage markets. In the mortgage sector, most of the sales generated by Filogix represent fees from lenders for origination and underwriting services based on a percentage of the funded mortgage amount.

Acquisition Rationale
The acquisition builds on Davis + Henderson's strategy of being a leading service provider to the financial services marketplace. With this acquisition, we deepen our relationships with current customers while also adding important new relationships.

The Filogix business is well positioned to serve growing segments of a growing mortgage market.

The acquisition adds a meaningful additional platform to Davis + Henderson's overall business, providing additional revenue diversification.

Approximately half of all residential mortgage funding in Canada is originated within the Filogix network.

Filogix has an experienced and proven management team that has agreed to continue in their leadership roles within the business.

The addition of Filogix is expected to be accretive to cash flows available for distribution per unit in its first full financial year as part of Davis + Henderson.

The Fund expects to continue its conservative distribution policy and maintain its monthly distributions at the current rate of $0.1250 per unit per month ($1.50 annualized) with the ongoing objective of delivering stable and growing distributions per unit.

The Fund's financial leverage is expected to remain low with a Debt to EBITDA(1) ratio of approximately 1.35 times.

Said Bob Cronin, CEO of Davis + Henderson: "The acquisition of Filogix is well aligned to our objective of being a leading service provider in the financial services marketplace in Canada. Filogix is a leading company in a growing market and their team has done an outstanding job in building the business and delivering value to their customers. We are very pleased that this experienced team will continue to lead Filogix in the next phase of its evolution."

Said Yousry Bissada, CEO of Filogix, "We are delighted that Davis + Henderson has embraced our vision for the business as we seek to expand the value of the services we offer and further grow our operation. As the business transitions from its present financial owner, we are pleased that our new partner shares our culture of commitment to market leadership, serving customers and valuing employees."

Headquartered in Toronto with offices in Calgary, London, Montreal and Vancouver, Filogix has 250 employees and its systems operate across Canada.

Related to mortgage lending services, Filogix provides:
an electronic service used by approximately 7,000 mortgage brokers and 2,500 members of lenders' in-house sales forces to originate and manage mortgage related data;

network access to more than 70 mortgage lenders to electronically receive and reply to mortgage application transaction detail from mortgage intermediaries;

an electronic underwriting platform for a growing number of mortgage lenders as a means of automating the workflow associated with the mortgage process including activities relating to adjudication, underwriting, closing and funding; and

professional services related to the integration and customization of mortgage technology.

For real estate boards and real estate agents, Filogix provides network and system access used by approximately 12,500 real estate agents from approximately 35 real estate boards or associations. Services include provision of online information related to multiple listings within Canada and including forms and other services to help real estate agents better service their customers. The Filogix systems are deployed in more bureaus in Canada than is the case for any other system provider.

For the year ended December 31, 2005, Filogix generated revenue of $40.8 million, approximately 14% higher than the prior year. For the year ended December 31, 2005, Filogix generated EBITDA(1) of approximately [$14.6] million, an increase of some [26]% over the prior year. Filogix has experienced growth in its business primarily attributed to:

increasing use of mortgage intermediaries by borrowers and lenders in the Canadian mortgage market;

growing adoption of the Filogix origination and underwriting systems by residential mortgage lenders; and

increasing overall residential mortgage funding activity.

Acquisition Financing
Davis + Henderson Income Fund has entered into an agreement with a syndicate of underwriters co-led by BMO Nesbitt Burns Inc. and Scotia Capital under which the underwriters have agreed to buy _ Subscription Receipts from Davis + Henderson Income Fund for sale to the public at a price of $_ per Subscription Receipt, representing an aggregate issue of $_ million (the "Offering"). Each Subscription Receipt represents the right of the holder to receive one trust unit of Davis + Henderson Income Fund upon closing of the acquisition of Filogix. Such funds will be used by the Fund to acquire, indirectly, the Filogix business. The remainder of the purchase price will be funded by Davis + Henderson through committed credit facilities provided by Scotia Capital and BMO Nesbitt Burns Inc. and a syndicate of lenders to be determined.

The securities to be offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

Conference call
Davis + Henderson Income Fund will hold an investor call at 4:00 p.m. (Eastern Time) on Thursday May 18, 2006 to discuss this acquisition. The call may be accessed by dialing 416-644-3433 within the Toronto area, or 1-800-814-4860 outside of Toronto. A playback of the call can also be accessed from May 18 to June 1, 2006 by dialing 416-640-1917 or 1-877-289-8525, and entering the access code 21189529#.

About Davis + Henderson
Davis + Henderson and its predecessors have been serving Canadian financial institutions and their account holders since 1875. Through an integrated service offering, Davis + Henderson is the market leading company in Canada assisting financial institutions with the operations of programs to their chequing and lending accounts. Davis + Henderson Income Fund is listed on the Toronto Stock Exchange, under the trading symbol DHF.UN.

Caution Concerning Forward-Looking Statements
This news release contains certain statements that constitute forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Davis + Henderson, Davis + Henderson Income Fund, Filogix, or developments in each of its respective business' industries, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Forward-looking statements include all disclosure regarding possible events, conditions or results of operations that are based on assumptions about future economic conditions and courses of action. Forward-looking statements may also include, without limitation, any statement relating to future events, conditions or circumstances. Davis + Henderson Income Fund cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and Davis + Henderson Income Fund does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change.

Risks related to Davis + Henderson Income Fund have been summarized in the Fund's latest Annual Information Form and quarterly financial reports available on www.Sedar.com or the Fund's web site at www.dhltd.com. With respect to the proposed acquisition of Filogix, additional risks include, among other things, exposure to potential loss of mortgage intermediaries and lenders as customers and exposure to fluctuation in mortgage and real estate activity due to economic conditions and other factors.

Contacts
For further information please contact: Bob Cronin, Chief Executive Officer at 416-696-7700, extension 5301 or Catherine Martin, Chief Financial Officer at 416-696-7700, extension 5265 or visit our web site at www.dhltd.com .

Notes
"Filogix" is a registered Canadian trademark of Filogix Inc.

® eSwitch is a registered Canadian and U.S. trademark of Davis + Henderson, Limited Partnership and patents pending. All other trademarks noted in this news release belong to their respective owners.

(1) "EBITDA" is not a defined term under Canadian generally accepted accounting principles. With respect to Filogix, it is determined by Davis + Henderson Income Fund as earnings before interest, taxes, depreciation, amortization expenses, reorganization expenses and stock option expenses. Investors are cautioned that EBITDA should not be construed as an alternative to using net income as a measure of profitability or as an alternative to the statement of cashflows. Further the Fund's method of calculating EBITDA may not be comparable to calculations used by other issuers.

Related Links:
http://www.filogix.com