Alaris Equity Partners Announces an Investment of US$59.5 Million into a New Partner

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CALGARY, Alberta, Aug. 31, 2023 (GLOBE NEWSWIRE) -- (all numbers in this release are in Canadian dollars (CDN$) unless otherwise noted) Alaris Equity Partners Income Trust (the “Trust”) (TSX: AD.UN) is pleased to announce that its subsidiary, Alaris Equity Partners USA, Inc. (collectively with the Trust and its other subsidiaries, “Alaris”) has made an investment of US$59.5 million (the “TSY Investment”) into The Shipyard, LLC. (“TSY” or “The Shipyard”), with a commitment to fund an additional US$5.5 million (“Tranche 2”) if TSY achieves certain financial hurdles.

“We’re very excited to be partnering with the founders and management of The Shipyard. The Shipyard team has built a wonderful company that has exhibited the ability to generate steady free cashflow and high growth without any material debt or capital expenditure requirements. The most important part of our investment, though, is the people. From top to bottom, founder and CEO Rick Milenthal has built a culture of trust and integrity that we feel will result in a tremendous long-term partnership for Alaris,” said Steve King, President and Chief Executive Officer, Alaris.

“The Alaris model of investment is perfect for a growing successful company like The Shipyard. They back our team and fuel our growth, fully empowering our management team to do what is best for our people and our clients,” said Rick Milenthal, Chief Executive Officer, The Shipyard

TSY Investment

The TSY Investment consists of: (i) US$42.5 million (the “TSY Preferred Contribution”) of preferred equity, entitling Alaris to an initial annualized distribution of US$5.95 million (the “TSY Distribution”); and (ii) US$17.0 million (the “TSY Common Equity”) for a minority common equity ownership in The Shipyard. The TSY Distribution is equivalent to a pre-tax yield of 14% in the first full year after the TSY Contribution. The Shipyard can elect to defer a portion of the TSY Distribution for up to 3% (US$1.28 million in the first full year) of the TSY Preferred Contribution with any such deferred distributions compounding at the current yield of the TSY Distribution. If The Shipyard achieves the financial hurdles, Tranche 2 will consist entirely of additional US$5.5 million of preferred equity and will have the same initial yield and rights as the initial TSY Investment.