CALGARY, ALBERTA--(Marketwire - June 9, 2011) -
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Alaris Royalty Corp. ("Alaris" or the "Company") (TSX:AD) is pleased to announce that the Company has closed the previously announced transaction with Centric Health Corporation ("Centric")(TSX:CHH), pursuant to which Centric has paid Alaris $65 million cash for a portion of its financial interest in LifeMark Health Limited Partnership ("LifeMark Health") and all of its interest in MEDIchair Ltd. ("MEDIchair") (and together with LifeMark Health, the "LifeMark Group") (the "Transaction").
Alaris will receive a $6.75 million annual preferred distribution (the "Distribution") from LifeMark Health, with a guaranteed increase of 4% per year thereafter. Under the terms of the Transaction, Centric has guaranteed the ongoing Distribution made by LifeMark Health to Alaris and has the option to purchase Alaris' remaining interest in LifeMark Health for $65.5 million within the year following the second anniversary of the Transaction (the "Purchase Option"). If the Purchase Option is not exercised within one year of the second anniversary of the Transaction, it will increase by 4% per year thereafter. With a total original cost of $74 million in the LifeMark Group, the Transaction represents a significant gain for Alaris while maintaining LifeMark Health as the Company's largest Private Company Partner (as defined herin).
As previously announced, Alaris has used a portion of the Transaction proceeds to pay down its $26.2 million revolving credit facility resulting in annual interest savings of approximately $1.7 million. The remaining $38.8 million of the proceeds will be used to fund new, or existing, Private Company Partners.
"We are excited to be entering into this new chapter with Centric as our partner. This transaction will greatly benefit Alaris shareholders through the accretive reinvestment of the $65 million in proceeds as well as by diversifying our revenue stream. We are also very pleased for the other unitholders and management of LifeMark who have crystalized a significant return based on their hard work and our unique structure."
A document titled, "LifeMark Health Transaction Details" is posted at www.alarisroyalty.com under the "Investor Briefcase" section. The document provides further detail regarding the benefits of the Transaction to Alaris and its shareholders.
The Company invests in 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. 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 expected Distribution, the use of the proceeds of the Transaction, including the Company's ability to reinvest the proceeds in new and existing Private Company Partners, and the repayment of debt. 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.
Statements containing forward-looking information 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: the Canadian and U.S. economies will continue to grow moderately in 2011; LifeMark Health's ability to pay the Distribution; 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. The information contained in this news release, including the information set forth under the heading "Risk Factors" in the Company's Annual Information Form dated March 25, 2011 (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.
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 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 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.
Manager of Investor Relations and Investment Analyst