Press release from Marketwire
Alaris Closes Previously Announced USD$66 Million Contribution and Confirms Dividend Increase on August Dividend Payable
Tuesday, July 02, 2013
Alaris Closes Previously Announced USD$66 Million Contribution and Confirms Dividend Increase on August Dividend Payable08:30 EDT Tuesday, July 02, 2013
CALGARY, ALBERTA--(Marketwired - July 2, 2013) -
NOT FOR DISTRIBUTION IN THE UNITED STATES. FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAW.
Alaris Royalty Corp. ("Alaris" or the "Corporation") (TSX:AD) is pleased to announce that it has closed the previously announced contribution of USD$66,000,000 (the "Sequel Contribution") to Sequel Youth and Family Services, LLC ("Sequel") effective July 1, 2013. In conjunction with its contribution, Alaris has entered into a Fourth Amended and Restated Operating Agreement (the "Operating Agreement") in respect of Sequel governing the members of Sequel. Pursuant to the terms of the Operating Agreement, in return for the Sequel Contribution, Alaris will receive a pre-tax annual preferred distribution of USD$9,900,000 (the "Sequel Distribution") over the next 12 months, which represents a pre-tax return of 15% per annum. Annually, commencing on July 1, 2014, the Distribution amount will be adjusted up or down by an amount equal to Sequel's percentage change in modified same program revenue over the preceding 12-month period compared to the next preceding 12-month period, subject to a collar of 5%.
The Corporation is also pleased to announce that as a result of the Sequel Contribution closing, Alaris is confirming the previously announced increase of its per share dividend to $0.12 per month from $0.115 (the "Dividend Increase"), which was announced subject to the Sequel Contribution closing. The new rate of dividend equals $1.44 per share on an annualized basis, which is a $0.06 per year increase over the previously annualized dividend of $1.38 per share. The first dividend for which the increase will apply is the dividend expected to be paid on August 15, 2013 to shareholders of record on July 31, 2013. This will be Alaris' seventh consecutive dividend increase as well as a 14% increase since the May 15, 2013 dividend payable.
The Corporation provides alternative financing to a diversified group of private businesses ("Private Company Partners") in exchange for royalties or distributions from the Private Company Partners, with the principal objective of generating stable and predictable cash flows for dividend payments to its shareholders. Royalties or distributions to Alaris from the Private Company Partners are structured as a percentage of a "top line" financial performance measure such as gross margin, same clinic sales, gross revenues and same-store sales and rank in priority to the owners' common equity position.
Sequel is a privately owned company founded in 1999 which develops and operates programs for people with behavioral, emotional, or physical challenges. Sequel offers a broad continuum of treatment options for children, adolescents, and adults. Its treatment options include; long-term residential treatment, short-term impact programs, shelter care, therapeutic group homes, therapeutic foster care, community-based services, in-home services, and alternative education programs. Sequel's populations include adjudicated youth, children with autism, and children, adolescents and adults with physical disabilities or sexual, substance abuse, emotional, or conduct disorders. Sequel operates in 17 states and serves clients from over 36 states. Sequel has an employee base of over 3,300 full and part time employees. More information about the Company can be found on its website at www.sequelyouthservices.com.
This news release contains forward-looking statements as defined under applicable securities laws. Statements other than statements of historical fact contained in this news release may be forward-looking statements under applicable securities legislation, including, without limitation, management's expectations, intentions and beliefs concerning: the amount of the Sequel Distribution and the adjustments thereto; the return to Alaris on the Sequel Contribution; and the dividend increase and the timing thereto. Many of these statements can be identified by looking for words such as "believe", "expects", "will", "intends", "projects", "anticipates", "estimates", "continues" or similar words or the negative thereof. To the extent any forward-looking statements herein constitute a financial outlook, they were approved by management as of the date hereof and have been included to provide an understanding with respect to 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.
Statements containing forward-looking information by their nature involve numerous assumptions and significant known and unknown facts and uncertainties of both a general and a specific nature. Key assumptions include, but are not limited to assumptions that: the Private Company Partners will continue to grow and may require additional capital from Alaris in the future; the Canadian and U.S. economies will grow moderately over the next 12 to 24 months; interest rates will not rise in a material nature over the next 12 to 24 months; more private companies will require access to alternative sources of capital; and the Corporation will obtain required regulatory approvals on a timely basis. In determining the Corporation's expectations for economic growth, management primarily considers historical economic data provided by the Canadian and U.S. governments and their agencies.
The forward-looking statements contained herein are subject to numerous known and unknown risks that may cause actual results to vary from those set forth in the forward-looking statements, including, but not limited to risks associated with: general economic conditions and changes in the financial markets; risks associated with the Private Company Partners and their respective businesses; a change in the ability of the Private Company Partners to continue to pay Alaris' preferred distributions; failure to obtain required regulatory approvals on a timely basis or at all; a failure to complete or realize the anticipated benefits of the Sequel Contribution and changes in legislation on government regulations and the interpretations thereof. In addition, the information set forth under the heading "Risk Factors" in the Corporation's Annual Information Form dated March 13, 2013 (a complete copy of which can be found on SEDAR at www.sedar.com) identifies additional factors that could affect the operating results and performance of the Corporation and may cause the actual results of the Corporation to differ materially from those anticipated in forward-looking statements.
As forward-looking statements are subject to risks, uncertainties and assumptions and should not be read as guarantees or assurances of future performance. Accordingly, 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Alaris Royalty Corp.
Manager of Investor Relations, Analyst