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Alaris Royalty Corp., formerly 6550568 Canada Inc. (the "Corporation") is pleased to announce that it has closed the acquisition of Alaris Income Growth Fund L.P. ("Alaris L.P.") (the "Acquisition"). Pursuant to the Acquisition the Corporation acquired: (i) the 750,000 issued and outstanding units (the "Alaris L.P. Units") of Alaris L.P. held by Alaris Commercial Trust, for an aggregate purchase price of approximately $8,000,000, with such purchase price being paid by way the issuance of 666,667 voting common shares in the capital of the Corporation ("Common Shares"); and (ii) all of the outstanding shares of Alaris IGF Corp., the general partner of Alaris L.P., from the holders thereof, for an aggregate purchase price of approximately $8,000,000, with such purchase price being satisfied by way of the issuance of 666,668 non-voting common shares in the capital of the Corporation ("Non-Voting Shares"). Alaris GP owns 750,010 Alaris L.P. Units, being the remaining issued and outstanding Alaris L.P. Units, and therefore, upon the completion of the Acquisition the Corporation acquired 100% of the issued and outstanding Alaris L.P. Units. In addition, the Corporation acquired $83,500,000 of Alaris L.P.'s outstanding $90,000,000 subordinated debt from 409790 Alberta Ltd. for $51,500,000 in cash and the issuance of 2,666,667 Common Shares. All of the Common Shares and Non-Voting Shares issued in connection with the Acquisition were issued on a post-consolidation basis.
The Corporation will continue the business and operations of Alaris L.P. Alaris L.P. invests in a diversified portfolio of private businesses ("Portfolio Companies") in exchange for royalties or distributions from the Portfolio Companies, with the principal objective of generating stable and predictable cash flows for dividend payments to its securityholders. Royalties or distributions to Alaris L.P from the Portfolio Companies are structured as a percentage 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.
Prior to closing the Acquisition, the Corporation convened its Annual and Special Meeting of the holders of Common Shares (the "AGM") at which the holders of the Common Shares approved the consolidation of the Company's outstanding Common Shares and Non-Voting Shares on the basis of one new share for each 542.245 shares currently held. Shareholders also approved the appointment of a new board of directors, the appointment of auditors, the change of the name of the Company to "Alaris Royalty Corp.", a new stock option plan and restricted share unit plan for the Corporation and also approved the conversion of Non-Voting Shares into Common Shares, with such conversion to take place at the discretion of the board of directors of the Corporation.
As approved at the AGM and concurrent with the closing of the Acquisition, the board of directors (the "Board") of the Corporation was reconstituted so that the current members of the Board are Clay Riddell, Jack Lee, Mitch Shier, Mary Ritchie, John P.A. Budreski, Stephen King and Gary Patterson. In addition, Sheldon Reid (President and Chief Executive Officer), Gary Bentham (Chief Financial Officer) and Bruce Allford (Corporate Secretary) resigned as officers of the Corporation and Stephen W. King (President) and Darren Driscoll (Chief Financial Officer) were appointed as officers of the Corporation.
Immediately prior to the closing of the Acquisition the Corporation satisfied the release conditions of its previously announced subscription receipt financing (the "Financing"), and issued an aggregate of 4,607,213 Common Shares (on a post consolidation basis) to the former holders of subscription receipts in accordance with the terms of the subscription receipt certificates.
Certain statements regarding the Corporation including management's assessments of future plans may constitute forward-looking statements under applicable securities laws and necessarily involve known and unknown risks and uncertainties, most of which are beyond the Corporation's control. These risks may cause actual financial and operating results, proposed transactions, performance, levels of activity and achievements to differ materially from those expressed in, or implied by, such forward-looking statements.
This news release shall not constitute an offer to sell, or the solicitation of an offer to buy, securities in the United States, or any province or territory of Canada.
For more information please contact:Alaris Royalty Corp.
Stephen W. King