Alaris Royalty Corp. Commits to Fund Up to US$91 Million to a New Partner and Contributes US$7 Million to Accscient
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CALGARY, Alberta, Sept. 14, 2018 (GLOBE NEWSWIRE) -- Alaris Royalty Corp. ("Alaris" or the "Corporation") (TSX: AD) is pleased to announce that it has contributed US$46,000,000 (the “BCC Contribution”) to a new partner, Body Contour Centers, LLC (“BCC”), and has committed to contributing an additional US$45,000,000 (the “Additional BCC Contributions”) to BCC in two future tranches dependent on BCC achieving certain financial targets. The Corporation is also pleased to announce a follow-on contribution of US$7,000,000 (the “Accscient Contribution”) into Accscient LLC (“Accscient”). The US$53,000,000 of contributions announced today add approximately $0.27 cents and $0.13 cents per share of revenue and net cash from operations respectively. Alaris has approximately $155,000,000 of undrawn capacity on its credit facility (the “Facility”) following today’s announcement and estimates its run-rate payout ratio to be 92%.
New Partner – Body Contour Centers, LLC
Alaris entered into subscription and operating agreements with BCC on September 14, 2018, pursuant to which Alaris made the BCC Contribution in exchange for preferred units in BCC (the “BCC Units”), which entitle Alaris to a US$6,440,000 distribution (the “BCC Distribution”) for the first full year following the transaction, representing an initial yield of 14%. BCC has the option to pay a portion of the BCC Distribution, subject to a maximum of 2% of the aggregate contributed capital to BCC in any given year as payment in kind (“PIK”) provided that any amounts subject to the PIK must be paid every three years. If utilized, any amounts PIK’d will compound monthly. The BCC Distribution will be adjusted annually (commencing January 1, 2020) based on the change in same clinic sales, subject to a 6% collar and will represent approximately 8.5% of Alaris’ revenue. The BCC Contribution was used to fund growth and provide partial liquidity to existing equity holders.
Alaris has also committed as part of the operating and subscription agreements with BCC to the Additional BCC Contributions consisting of US$20,000,000 (“Tranche 2”) and US$25,000,000 (“Tranche 3”). The Tranche 2 and Tranche 3 contributions will be funded upon BCC satisfying certain financial targets. If the Additional BCC Contributions are funded, Alaris will have contributed a total of US$91,000,000 to BCC. The Additional BCC Contributions will carry the same terms as the original BCC Contribution. Up to 25% of the BCC Units are redeemable at par at any time following the earlier of the second tranche closing and three years from the original closing date, prior to such time these units are non-redeemable.