How Is Non-Control Equity Possible

Non-control equity is possible when:

1. An equity partner does not rely on a future exit to generate their returns

  • Alaris DOES NOT require a “Put Option” or a predetermined return of capital
    • Alaris does not have the ability to force an exit
    • Alaris generates its returns monthly through distribution payments, not on exit
    • The common equity holders have a call option after three years
      • Allows common equity holders to sell the business or repurchase Alaris' units
  • Since Alaris does not require an exit, Alaris DOES NOT require control:
    • No requirement of board representation or management participation, but will participate upon request

2. The returns are not directly tied to the company’s bottom line results

  • Alaris' distributions are dependant on the growth in a top line metric vs the prior fiscal year
    • Any margin or operational improvement will be to the benefit of the common equity holders

Alaris’ unique investment structure calls for returns in the form of equity distributions that are reset annually based on a company’s top line results year over year.