CALGARY, ALBERTA--(Marketwire - April 27, 2010) -
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Alaris Royalty Corp. ("Alaris" or the "Corporation") (TSX:AD) announced today that it has reached an agreement with a syndicate of underwriters (the "Underwriters") led by Acumen Capital Finance Partners Limited, pursuant to which the Corporation will sell on a "bought-deal" basis, subject to regulatory approval, 1,600,000 common shares of the Corporation (the "Common Shares") at a price of $9.00 per Common Share for total gross proceeds of $14,400,000 (the "Offering"). The Corporation has also granted to the Underwriters an over-allotment option (the "Over-Allotment Option") to purchase up to an additional 240,000 Common Shares at the same price, exercisable in whole or in part at any time for a period of up to 30 days following closing of the Offering, to cover over-allotments.
The net proceeds of the Offering will be used to contribute an additional $2,000,000 to the previously announced $5,000,000 partnership with KMH Cardiology Centres Incorporated, an additional contribution of $8,000,000 in LifeMark Health Limited Partnership, and for general corporate purposes including a reduction in Alaris' subordinated debt. If the Over-Allotment is exercised in full, the additional $2,160,000 in gross proceeds will be used to eliminate any remaining subordinated debt.
The partnership contributions are expected to result in an increase in revenue for Alaris over the next twelve months of approximately $2,017,850. The total benefit to Alaris, from the two partnership contributions and the elimination of Alaris' subordinated debt, assuming the Over-Allotment is exercised in full, would have been approximately $0.07 in proforma earnings per share for the year ended December 31, 2009 (approximately $0.07 in proforma earnings per share if the Over-Allotment is not exercised and the subordinated debt is not repaid in full). "We are very pleased to have increased Alaris' revenue diversification and proforma earnings per share as well as the strengthening of our balance sheet", said Steve King, President and CEO of Alaris. "These transactions are consistent with our business plan of growing our company with accretive transactions with new and current partners" said King.
The Offering is expected to close on or about May 18, 2010, subject to normal regulatory approvals, including approval of the Toronto Stock Exchange. The Common Shares will be offered in each of the provinces of Canada, other than the province of Québec, by way of a short form prospectus.
The securities offered have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States absent registrations or an exemption from the registration requirements. This release does 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.
The Corporation provides alternative financing for a diversified group of private businesses ("Private Company Partners") in exchange for royalties or distributions from the Private Company Partners, with the principle objective of generating stable and prediction cash flows for dividend payments to its shareholders. Royalties or distributions from the Private Company Partners are structured as a percentage of "top line" financial performance measures such as gross margin and same store sales and rank in priority to the owners, and equity position.
Forward Looking Statements
This press release contains forward-looking statements and forward-looking information within the meaning of applicable Canadian securities legislation (collectively, "forward-looking statements"). Specifically, this press release contains forward-looking statements relating to the use of proceeds of the Offering, the expected increase to Alaris' annualized earnings per share, the receipt of regulatory approval, the filing of the short form prospectus, the financial impact on Alaris of the Offering combined with the uses of the proceeds, the provinces the Common Shares will be offered in, increased revenues following the Offering and partnership contributions and the closing date of the Offering. The forward-looking statements are based on certain key expectations and assumptions made by Alaris, which are subject to inherent risks and uncertainties. These assumptions include assumptions concerning the timing of obtaining regulatory approvals, the use of proceeds, the calculation of an increase to Alaris' earnings per share and the closing of the Offering, which expectations and assumptions management of Alaris believes to be reasonable at this time. Although Alaris believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable at the date of this press release, undue reliance should not be placed on the forward-looking statements and information as Alaris can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. For example, Alaris' earnings per share may be affected if any distributions from our Private Company Partners do not get paid as required, or there is a downward adjustment to the performance metric on the anniversary date of our agreements with our Private Company Partners. In addition, the closing of the Offering could be delayed if Alaris is not able to obtain the necessary regulatory and stock exchange approvals on the timelines it has planned. The Offering will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied. Accordingly, there is a risk that the Offering will not be completed within the anticipated time or at all. Further, the intended use of the proceeds of the Offering by Alaris may change if the board of directors of Alaris determines that it would be in the best interests of Alaris to deploy the proceeds for some other purpose.
The forward-looking statements contained in this press release are made as of the date hereof and Alaris undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.