CALGARY, ALBERTA--(Marketwired - April 18, 2013) -
NOT FOR DISSEMINATION IN THE UNITED STATES
Alaris Royalty Corp. ("Alaris" or the "Corporation") (TSX:AD) is pleased to announce that it has given Centric Health Corporation ("Centric") consent for an early redemption (the "Redemption") of a portion of the preferred partnership units ("LifeMark Units") of LifeMark Health Limited Partnership ("LifeMark") held by Alaris, for aggregate gross proceeds of $22.5 million (the "Proceeds"). The Redemption closed earlier today.
Prior to the Redemption, Alaris held LifeMark Units with a total redemption value equal to $65.5 million, which entitled Alaris to receive an annualized distribution of $7.0 million. Following the Redemption, Alaris will hold LifeMark Units having a redemption value of $43.0 million, which will entitle Alaris to receive an annualized distribution equal to $4.6 million (the "Distribution"). Pursuant to the terms of the LifeMark Units, the Distribution will increase by 4% on July 1st of every year for so long as the LifeMark Units remain outstanding and, with each annual increase, the redemption value of the remaining LifeMark Units will increase by a similar margin. Therefore, as of July 1st, 2013 the redemption value of the remaining LifeMark Units will increase to $44.7 million while the Distribution will increase to $4.8 million, on an annualized basis. Centric has the right to fully redeem the remaining LifeMark Units held by Alaris as of June 9, 2013.
"We are pleased that Centric has been able to successfully restructure their balance sheet. The restructuring has strengthened Centric's overall financial position, which reduces the risk of our remaining interests in LifeMark. The timing of receiving the $22.5 million of Proceeds, at close to a 9.4x cash flow multiple, is also very good for us given our active deal pipeline", said Steve King, President and CEO, Alaris.
Alaris currently has approximately $14.0 million of debt drawn on its $50.0 million credit facility (the "Facility"). It is expected that the Proceeds will be used to pay down the existing Facility, with the remaining $8.5 million of Proceeds to be used to fund future contributions to new or existing partnerships and for general corporate purposes.
About Alaris: (www.alarisroyalty.com)
The Corporation provides alternative financing to a diversified group of private businesses ("Private Company Partners") in exchange for royalties or distributions from the Private Company Partners, with the principal objective of generating stable and predictable cash flows for dividend payments to its shareholders. Royalties or distributions to Alaris from the Private Company Partners are structured as a percentage of a "top line" financial performance measure such as gross margin, same clinic sales, gross revenues and same-store sales and rank in priority to the owners' common equity position.
This news release contains forward-looking statements or forward-looking information (collectively, "forward-looking statements") as defined by applicable securities legislation. Statements other than statements of historical fact contained in this news release may be forward-looking statements, including, without limitation, management's expectations, intentions, beliefs and statements concerning the Distribution and increases thereto, the redemption value of the remaining LifeMark Units held by Alaris, the use of the Proceeds, the Company's ability to reinvest the Proceeds in new and existing partnerships and the repayment of debt under the Facility. Many of these statements can be identified by looking for words such as "believe", "expects", "will", "intends", "projects", "anticipates", "estimates", "continues" or similar words or the negative thereof. There can be no assurance that the plans, intentions or expectations upon which these forward looking statements are based will occur.
Forward-looking statements by their nature involve numerous assumptions and significant known and unknown facts and uncertainties of both a general and a specific nature. Key assumptions include, but are not limited to assumptions that: Redemption will be completed on the terms and conditions set forth above, the Canadian and U.S. economies will continue to grow moderately in 2013; the Company will be able to identify and close new opportunities with new and existing Private Company Partners; interest rates will remain stable; more private companies will require access to alternative sources of capital; and capital markets will continue to improve. In determining the Company's expectations for economic growth, management primarily considers historical economic data provided by the Canadian and U.S. governments and their agencies.
Forward-looking statements are subject to risks, uncertainties and assumptions and should not be read as guarantees or assurances of future performance. Accordingly, readers are cautioned not to place undue reliance on any forward-looking statements 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. Such factors include, without limitation, risks associated with: the general economic conditions in Canada, the United States and globally; the dependence of Alaris on the Private Company Partners; reliance on key personnel; failure to complete or realize the anticipated benefits of Alaris' arrangements with the Private Company Partners; limited diversification of the Private Company Partners; management of future growth; availability of future financing; competition; government regulation; leverage and restrictive covenants under the Company's Facility; the ability of the Private Company Partners to terminate their agreements with the Company; risks relating to the Private Company Partners and their businesses; fluctuations of dividends; restrictions on the potential growth of Alaris as a consequence of the payment by Alaris of substantially all of its operating cash flow; income tax related risks; ability to recover from the Private Company Partners for defaults under its agreements therewith (as defined herein). The information set forth under the heading "Risk Factors" in the Company's Annual Information Form dated March 13, 2013 (a complete copy of which can be found on SEDAR at www.sedar.com) identifies additional factors that could affect the operating results and performance of the Company and may cause the actual results of the Company to differ materially from those anticipated in 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 expectations represented in such forward-looking statements 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.