Alaris Royalty Corp. Contributes US$15 Million to a New Partner and Closes Amendments to Its Credit Facility

NOT FOR DISTRIBUTION IN THE UNITED STATES. FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAW.

CALGARY, Alberta , Jan. 23, 2018 (GLOBE NEWSWIRE) -- Alaris Royalty Corp. ("Alaris" or the "Corporation") (TSX:AD) is pleased to announce that it has closed its previously disclosed contribution of US$15.0 million (approximately CAD$18.8 million) (the “Heritage Contribution”) to Heritage Restoration, Holdings, LLC (“Heritage”), in exchange for an annual distribution of US$2.25 million (approximately CAD$2.81 million) (the “Heritage Distribution”). The Corporation is also pleased to announce it has closed the amended credit facility (the “Facility”) it had previously announced.  The Heritage Distribution will account for approximately 3.0% of Alaris’ annualized revenue and is accretive to cash flow adding approximately $0.04 cents per share to Alaris’ net cash from operations (after tax). Alaris has approximately $170 million of undrawn capacity on the Facility following today’s announcement.

New Partner – Heritage

Alaris entered into subscription and operating agreements with Heritage on January 23, 2018, pursuant to which Alaris made the US$15.0 million Heritage Contribution in exchange for preferred units in Heritage (the “Heritage Units”), which will entitle Alaris to the US$2.25 million Heritage Distribution for the first full year following the transaction, which equates to an initial yield of 15%. US$3.0 million of the Heritage Units are redeemable at par at any time. The performance metric dictating the annual percentage change in the Heritage Distribution is gross margin, subject to a 6% collar and will reset for the first time on January 1, 2019. The Heritage Contribution was used to fund the management buyout of the existing shareholder.

Founded in 1981, and under the leadership of CEO, Andy Bear since 2003, Heritage is a leading specialty contractor providing masonry and masonry related services to the commercial building industry. With a focus on the restoration of existing structures, Heritage’s services include masonry procurement, installation and restoration, concrete structure restoration, waterproofing and coating repair, Heritage provides quality customer service and workmanship throughout the entire New England area, employing over 100 highly skilled masons; carpenters; and laborers during peak times. New England’s abundance of university campuses, hospitals, and historic urban architecture utilizing brick and stone construction, combined with the high concentrations of concrete parking structures and tunnels, represents large and attractive market opportunities for Heritage, In addition, the attractive macroeconomic environment for new construction activity in the metropolitan Boston area also continues to provide significant opportunities for Heritage.