Alaris Equity Partners Income Trust (“
Alaris” or
the “
Trust”) (TSX: AD.UN) is pleased to announce
that it has entered into an agreement with a syndicate of
underwriters (the “
Underwriters”) led by CIBC
Capital Markets, National Bank Financial and RBC Capital Markets
pursuant to which the underwriters have agreed to purchase $65
million aggregate principal amount of listed senior unsecured
debentures due March 31, 2027 (the “
Debentures”)
at a price of $1,000 per Debenture (the
“
Offering”). The Trust has also granted the
Underwriters an option to purchase up to an additional $9.75
million aggregate principal amount of Debentures, on the same terms
and conditions, exercisable in whole or in part, up to 30 days
following closing of the Offering. The Offering is expected to
close on or about February 4, 2022 (the “
Closing
Date”). Unless otherwise stated, all numbers in this press
release are presented in Canadian dollars.
The Trust intends to use the net proceeds of the
Offering to partially repay outstanding indebtedness under Alaris'
subsidiary’s senior debt facility (the “Senior Debt
Facility”) which may be subsequently redrawn and used to
fund future investments in new Partner (as defined below)
investments or general trust purposes.
The Debentures will bear interest at a rate of
6.25% per annum, payable semi-annually in arrears on the last
business day of March and September of each year commencing on
March 31, 2022. The first payment will include accrued and unpaid
interest for the period from the Closing Date to, but excluding,
March 31, 2022. The Debentures will mature on March 31, 2027 (the
“Maturity Date”).
The Debentures will not be redeemable by the
Trust before March 31, 2025 (the “First Call
Date”). On and after the First Call Date and prior to
March 31, 2026, the Debentures will be redeemable, in whole or in
part, from time to time at the Trust’s option at a redemption price
equal to 103.125% of the principal amount of the Debentures
redeemed plus accrued and unpaid interest, if any, up to but
excluding the date set for redemption. On and after March 31, 2026
and prior to the Maturity Date, the Debentures will be redeemable,
in whole or in part, from time to time at the Trust’s option at par
plus accrued and unpaid interest, if any, up to but excluding the
date set for redemption. The Trust shall provide not more than 60
nor less than 30 days’ prior notice of redemption of the
Debentures. The Trust has the option to satisfy its obligations to
repay the principal amount of and premium (if any) on the
Debentures due at redemption or on maturity of the Debentures by
issuing and delivering that number of freely tradeable trust units
of the Trust to Debenture holders in accordance with the terms of
the Indenture.
A preliminary short form prospectus will be
filed with securities regulatory authorities in all provinces of
Canada, other than the province of Québec. The Offering is subject
to customary regulatory approvals, including the approval of the
Toronto Stock Exchange and the approval of the lenders under the
Senior Debt Facility.
This new release is not an offer of securities
of Alaris for sale in the United States. The Debentures have not
been and will not be registered under the U.S. Securities Act of
1933, as amended, and the Debentures may not be offered or sold in
the United States except pursuant to an applicable exemption from
such registration. No public offering of securities is being made
in the United States. This news release shall 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 jurisdiction in which
such offer, solicitation or sale would be unlawful.
ABOUT ALARIS
Alaris, through its subsidiaries, provides
alternative financing to private companies
("Partners") in exchange for distributions,
dividends and interest (“Distributions”) with the
principal objective of generating stable and predictable cash flows
for dividend payments to its unitholders. Distributions from the
Partners are adjusted each year based on the percentage change 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.
FORWARD LOOKING STATEMENTS
This news release contains forward-looking
statements, including forward-looking statements within the meaning
of "safe harbor" provisions under applicable securities laws
(“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
Closing Date and the intended use of proceeds for the Offering,
including the repayment of indebtedness under its senior debt
facility and future investments in Partners; redemptions of
Debentures issued pursuant to the Offering; . Many of these
statements can be identified by words such as "believe", "expects",
"will", "intends", "projects", "anticipates", "estimates",
"continues" or similar words or the negative thereof. Any
forward-looking statements herein which constitute a financial
outlook or future-oriented financial information (including the
impact on Run Rate Payout Ratio) were approved by management as of
the date hereof and have been included to provide an understanding
of Alaris' financial performance and are subject to the same risks
and assumptions disclosed herein. There can be no assurance that
the plans, intentions or expectations upon which these
forward-looking statements are based will occur.
By their nature, forward-looking statements
require Alaris to make assumptions and are subject to inherent
risks and uncertainties. Assumptions about the performance of the
Canadian and U.S. economies over the next 24 months and how that
will affect Alaris’ business and that of its Partners (including,
without limitation, the ongoing impact of COVID-19) are material
factors considered by Alaris management when setting the outlook
for Alaris. Key assumptions include, but are not limited to,
assumptions that: the Offering will close as expected and that
Alaris will obtain regulatory and third party approvals for the
Offering; the conditions to closing the Offering, including the
consent of the Toronto Stock Exchange and the consent of Alaris'
lenders under Alaris’s credit facility, will be satisfied; the
Canadian and U.S. economies will continue to stabilize from the
economic downturn created by COVID-19 and will not be detrimentally
impacted over the next 12 months; inflation rates; interest rates
will not rise in a material way over the next 12 months; that those
Partners previously affected by COVID-19 will not see a detrimental
impact from COVID-19 over the next 12 months; following a recovery
from the COVID-19 impact, the businesses of the majority of our
Partners will continue to grow; the businesses of new Partners and
those of existing partners will perform in line with Alaris’
expectations and diligence; more private companies will require
access to alternative sources of capital and that Alaris will have
the ability to raise required equity and/or debt financing on
acceptable terms. Management of Alaris has also assumed that the
Canadian and U.S. dollar trading pair will remain in a range of
approximately plus or minus 15% of the current rate over the next 6
months. In determining expectations for economic growth, management
of Alaris primarily considers historical economic data provided by
the Canadian and U.S. governments and their agencies as well as
prevailing economic conditions at the time of such
determinations.
Forward-looking statements are subject to risks,
uncertainties and assumptions and should not be read as guarantees
or assurances of future performance. The actual results of the
Trust and the Partners could materially differ from those
anticipated in the forward-looking statements contained herein as a
result of certain risk factors, including, but not limited to: the
ongoing impact of COVID-19 on the Trust and its Partners (including
which, if any, Partners may experience a slowdown or closure of its
business); the ability of our Partners and, correspondingly, Alaris
to meet performance expectations for 2022 and beyond as a result of
COVID-19 or otherwise; any change in the senior lenders under the
Facility’s outlook for Alaris’ business; management's ability to
assess and mitigate the ongoing impacts of COVID-19; the dependence
of Alaris on the Partners; reliance on key personnel; general
economic conditions, including the ongoing impact of COVID-19 on
the Canadian, U.S. and global economies; failure to complete or
realize the anticipated benefit of Alaris’ financing arrangements
with the Partners; a failure of the Trust or any Partners to obtain
required regulatory approvals on a timely basis or at all; changes
in legislation and regulations and the interpretations thereof;
risks relating to the Partners and their businesses, including,
without limitation, a material change in the operations of a
Partner or the industries they operate in; inability to close
additional Partner contributions in a timely fashion, or at all; a
change in the ability of the Partners to continue to pay Alaris’
Distributions; a change in the unaudited information provided to
the Trust; a failure of a Partner (or Partners) to realize on their
anticipated growth strategies; a failure to achieve resolutions for
outstanding issues, including payment of any deferred
Distributions, with Partners on terms materially in line with
management’s expectations or at all; and a failure to realize the
benefits of any concessions or relief measures provided by Alaris
to any Partner or to successfully execute an exit strategy for a
Partner where desired. Additional risks that may cause actual
results to vary from those indicated are discussed under the
heading "Risk Factors" and "Forward Looking Statements" in the
Trust’s Management Discussion and Analysis and Annual Information
Form for the year ended December 31, 2020, which are filed under
the Trust’s profile at www.sedar.com and on its website at
www.alarisequitypartners.com.
This news release contains future-oriented
financial information and financial outlook information
(collectively, "FOFI") about increases to the Trust's net operating
cash per flow per unit and liquidity, each of which are subject to
the same assumptions, risk factors, limitations, and qualifications
as set forth above. Readers are cautioned that the assumptions used
in the preparation of such information, although considered
reasonable at the time of preparation, may prove to be imprecise
and, as such, undue reliance should not be placed on FOFI and
forward-looking statements. Alaris' actual results, performance or
achievement could differ materially from those expressed in, or
implied by, these forward-looking statements and FOFI, or if any of
them do so, what benefits the Trust will derive therefrom. The
Trust has included the forward-looking statements and FOFI in order
to provide readers with a more complete perspective on Alaris’
future operations and such information may not be appropriate for
other purposes. Alaris disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
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 assumptions
reflected in the forward-looking statements contained herein 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.
Neither the TSX nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX) accepts responsibility for the adequacy or accuracy of this
release.
For further information please
contact:
ir@alarisequity.comP: (403) 260-1457Alaris
Equity Partners Income TrustSuite 250, 333 24th Avenue S.W.Calgary,
Alberta T2S 3E6www.alarisequitypartners.com
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