Alaris Equity Partners Announces US$14.8 Million in Follow-On Contributions



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CALGARY, Alberta, Dec. 06, 2021 (GLOBE NEWSWIRE) -- Alaris Equity Partners Income Trust ("Alaris" or the "Trust") (TSX: AD.UN) is pleased to announce that it has made two follow-on investments (the “Follow-On Investments): 1) US$9.5 million (the “3E Contribution”) in to 3E, LLC (“3E”); and 2) US$5.3 million (the “D&M Contribution”) to Vehicle Leasing Holdings, LLC doing business as D&M Leasing (“D&M”).  It is estimated that, as a result of the Follow-On Investments and associated cash flows, Alaris’ Run Rate Payout Ratio improves by approximately 1% and is at the low end of the 65% to 70% range. Alaris has deployed in excess of $350 million over the last twelve months, of which approximately US$43 million has been follow-on capital provided to existing Partners.

“Supporting our partners as they grow is a vital part of being a good long-term partner. As our portfolio has grown, follow-on investments have also become a larger part of our annual capital deployment program.” said Steve King, President & CEO, Alaris.

3E Follow-on

The Trust contributed an additional US$9.5 million into 3E, in exchange for initial annualized distributions of US$1.2 million, with the first reset based on year over year changes in gross profit to occur on January 1, 2023. Following the 3E Contribution, Alaris has US$39.5 million invested in 3E and is collecting approximately US$5.4 million in annualized distributions. Proceeds from the 3E Contribution were used to partially fund two acquisitions. The acquisitions will help diversify the business across service offerings and are in similar geographies in which they currently operate.

3E is a utility service provider that installs, inspects, maintains and replaces critical infrastructure for large investor-owned utility companies. 3E operates under multiple subsidiary entities with operations across the Mid Atlantic, Southeastern and Midwestern United States including Georgia, Illinois, Michigan, Texas, Oklahoma, Tennessee, Missouri, Kentucky, Louisiana, Arkansas, Mississippi, Virginia and Maryland.

D&M Follow-on

The D&M Contribution consisted of US$4.5 million in preferred equity and US$0.8 million of a short-term subordinated note. Following the D&M Contribution, Alaris has US$75.4 million invested in D&M and is collecting approximately US$9.5 million in annualized distributions from the company, in addition to common equity distributions on the Alaris common equity investment in D&M. Proceeds from the D&M Contribution were used by D&M to acquire a complimentary business.

D&M is the largest independent direct-to-consumer provider of vehicle sourcing and leasing services in the United States. D&M is a fixture in the Texas market, with operations in Fort-Worth, Dallas, Grand Prairie, Austin, and Houston, as well as a prevalent online business. D&M has invested heavily in its online presence and has been providing online leasing and sales for over 25 years.

ABOUT ALARIS:
Alaris, through its subsidiaries, provides alternative financing to private companies ("Partners") in exchange for distributions with the principal objective of generating stable and predictable cash flows for dividend payments to its shareholders. Distributions from the Partners are adjusted each year based on the percentage change of a "top line" financial performance measure such as gross margin and same-store sales and rank in priority to the owners' common equity position.

NON-IFRS MEASURES:
Run Rate Payout Ratio refers to Alaris' total distribution per unit expected to be paid over the next twelve months divided by the estimated net cash from operating activities per unit Alaris expects to generate over the same twelve-month period (after giving effect to the impact of all information disclosed as of the date of this report).

The term Run Rate Payout Ratio (the "Non-IFRS Measure") are not standard measures under IFRS. Alaris' calculation of the Non-IFRS Measure may differ from those of other issuers and, therefore, should only be used in conjunction with the Trust’s annual audited financial statements, which are available under the Trust's profile on SEDAR at www.sedar.com.

FORWARD LOOKING STATEMENTS

This news release contains forward-looking statements, including forward-looking statements within the meaning of "safe harbor" provisions under applicable securities laws (“forward-looking statements”). Statements other than statements of historical fact contained in this news release may be forward-looking statements, including, without limitation, management's expectations, intentions and beliefs concerning: the financial impact of the 3E Contribution and D&M Contribution, including the impact on Run Rate Payout Ratio; resets on the new 3E and D&M distributions; [and the outstanding indebtedness under the Facility and uses of proceeds thereunder.] Many of these statements can be identified by words such as "believe", "expects", "will", "intends", "projects", "anticipates", "estimates", "continues" or similar words or the negative thereof. Any forward-looking statements herein which constitute a financial outlook or future-oriented financial information (including the impact on Run Rate Payout Ratio) were approved by management as of the date hereof and have been included to provide an understanding of Alaris' financial performance and are subject to the same risks and assumptions disclosed herein. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur.

By their nature, forward-looking statements require Alaris to make assumptions and are subject to inherent risks and uncertainties. Assumptions about the performance of the Canadian and U.S. economies over the next 24 months and how that will affect Alaris’ business and that of its Partners (including, without limitation, the ongoing impact of COVID-19) are material factors considered by Alaris management when setting the outlook for Alaris. Key assumptions include, but are not limited to, assumptions that: the Canadian and U.S. economies will continue to stabilize from the economic downturn created by COVID-19 and will not be detrimentally impacted over the next 12 months; interest rates will not rise in a material way over the next 12 months; that those Alaris Partners previously affected by COVID-19 will not see a detrimental impact from COVID-19 over the next 12 months; following a recovery from the COVID-19 impact, the businesses of the majority of our Partners will continue to grow; the businesses of new Partners and those of existing partners will perform in line with Alaris’ expectations and diligence; more private companies will require access to alternative sources of capital and that Alaris will have the ability to raise required equity and/or debt financing on acceptable terms. Management of Alaris has also assumed that the Canadian and U.S. dollar trading pair will remain in a range of approximately plus or minus 15% of the current rate over the next 6 months. In determining expectations for economic growth, management of Alaris primarily considers historical economic data provided by the Canadian and U.S. governments and their agencies as well as prevailing economic conditions at the time of such determinations.

Forward-looking statements are subject to risks, uncertainties and assumptions and should not be read as guarantees or assurances of future performance. The actual results of the Trust and the Partners could materially differ from those anticipated in the forward-looking statements contained herein as a result of certain risk factors, including, but not limited to: the ongoing impact of COVID-19 on the Trust and its Partners (including which, if any, Partners may experience a slowdown or closure of its business); the ability of our Partners and, correspondingly, Alaris to meet performance expectations for 2021 and beyond as a result of COVID-19 or otherwise; any change in the senior lenders under the Facility’s outlook for Alaris’ business; management's ability to assess and mitigate the ongoing impacts of COVID-19; the dependence of Alaris on the Partners; reliance on key personnel; general economic conditions, including the ongoing impact of COVID-19 on the Canadian, U.S. and global economies; failure to complete or realize the anticipated benefit of Alaris’ financing arrangements with the Partners; a failure of the Trust or any Partners to obtain required regulatory approvals on a timely basis or at all; changes in legislation and regulations and the interpretations thereof; risks relating to the Partners and their businesses, including, without limitation, a material change in the operations of a Partner or the industries they operate in; inability to close additional Partner contributions in a timely fashion, or at all; a change in the ability of the Partners to continue to pay Alaris’ distributions; a change in the unaudited information provided to the Trust; a failure of a Partner (or Partners) to realize on their anticipated growth strategies; a failure to achieve resolutions for outstanding issues with Partners on terms materially in line with management’s expectations or at all; and a failure to realize the benefits of any concessions or relief measures provided by Alaris to any Partner or to successfully execute an exit strategy for a Partner where desired. Additional risks that may cause actual results to vary from those indicated are discussed under the heading "Risk Factors" and "Forward Looking Statements" in the Trust’s Management Discussion and Analysis and Annual Information Form for the year ended December 31, 2020, which are filed under the Trust’s profile at www.sedar.com and on its website at www.alarisequitypartners.com.

This news release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about increases to the Trust's net operating cash per flow per unit and liquidity, each of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth above. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on FOFI and forward-looking statements. Alaris' actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and FOFI, or if any of them do so, what benefits the Trust will derive therefrom. The Trust has included the forward-looking statements and FOFI in order to provide readers with a more complete perspective on Alaris’ future operations and such information may not be appropriate for other purposes. Alaris disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Readers are cautioned not to place undue reliance on any forward-looking information contained in this news release as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements. Statements containing forward-looking information reflect management’s current beliefs and assumptions based on information in its possession on the date of this news release. Although management believes that the assumptions reflected in the forward-looking statements contained herein are reasonable, there can be no assurance that such expectations will prove to be correct.

The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this news release are made as of the date of this news release and Alaris does not undertake or assume any obligation to update or revise such statements to reflect new events or circumstances except as expressly required by applicable securities legislation.

Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.

For further information please contact:

ir@alarisequity.com
P: (403) 260-1457
Alaris Equity Partners Income Trust
Suite 250, 333 24th Avenue S.W.
Calgary, Alberta T2S 3E6
www.alarisequitypartners.com



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