CALGARY, AB , July 23, 2020 /CNW/ - Alaris Royalty Corp. (" Alaris " or the " Corporation ") (TSX:AD.TO) is pleased to announce that Ms. Sophia Langlois has been appointed to Alaris' Board of Directors (the " Board ") effective July 17 , 2020. Alaris is also pleased to announce that the Board has approved the proposed conversion of Alaris to a publicly traded income trust to be named Alaris Equity Partners Income Trust (the " Trust "), pursuant to a statutory plan of arrangement under the provisions of the Canada Business Corporations Act (the " Arrangement "). In connection with the Arrangement, Alaris has called a special meeting of shareholders (which will be conducted as a virtual meeting) to be held at 11:00 a.m. (mountain time) on August 31, 2020 (the " Meeting ") with the management information circular - proxy statement (the " Circular ") in respect of the Meeting expected to be mailed and filed on or about July 24 , 2020.
Appointment of Sophia Langlois to the Board of Directors
Ms. Langlois was a board member of SAIT from 2014 until mid-2020, serving as the Vice-Chair of the Board, Audit Committee chair, Member of the Executive committee and was formerly the Chair of the Investment Committee. She was a Partner at KPMG Canada from 2006 until early 2020. She has 28 years of experience in a broad range of industries delivering assurance and securities services and also led the Corporate Services group for KPMG Calgary for three years and was the KPMG National Audit Partner in charge of People Strategy. Ms. Langlois holds a Bachelor of Business Commerce degree with a major in Accounting from the University of Calgary , a CPA, CA designation, a CPHR designation and the ICD.D designation from the Institute of Corporate Directors.
About the Arrangement
The Arrangement, if approved, will result in shareholders of Alaris transferring their common shares to the Trust for an equivalent number of units of the Trust (" Trust Units "), provided that Trust Units otherwise issuable to "Non-Eligible US Shareholders" under the Arrangement (as further described in the Circular) will be sold on behalf of such Non-Eligible US Shareholders over the facilities of the TSX or by private sale and each Non-Eligible US Shareholder will receive a pro-rata share of the cash proceeds from the sale of such Trust Units (less any applicable withholding taxes) in lieu of Trust Units. Upon completion of the Arrangement, the Trust will own, indirectly, all of the shares of the Corporation which will continue to carry on the same activities currently carried on by the Corporation and all of the directors of the Corporation will serve as trustees of the Trust. The current officers of the Trust will be the same individuals who currently act as officers of the Corporation. Subject to the completion of the Arrangement and no material change in Alaris' expected cashflow, it is expected that the Trust's distribution will increase over the Corporation's current quarterly dividend by $0.02 per quarter ( $0.08 on an annualized basis). Otherwise it is expected that the Trust's distribution policy will remain consistent with the Corporation's current dividend policy and, provided the Arrangement is completed, it is expected the Trust's first distribution will be payable on or about October 15, 2020 to unitholders of record on September 30, 2020 at the new increased level of $0.31 per Trust Unit for the quarter ended September 30, 2020 ( $1.24 per Trust Unit on an annualized basis).
Board Recommendation and Anticipated Benefits
The Board has unanimously determined that the Arrangement is fair to shareholders and in the best interests of Alaris and unanimously recommends that the shareholders vote for the Arrangement. The Board made its determination based upon consultation with its legal and other advisors, and based in part on the fairness opinion received from Acumen Capital Finance Partners Limited (" Acumen "). The determination of the Board is based on various factors to be described more fully in the Circular and includes (among others) the following anticipated benefits that the Corporation believes will enhance long-term shareholder value:
- a materially simplified cross-border investment structure involving fewer foreign jurisdictions, which should reduce compliance and other administrative costs and Alaris' exposure to changes in foreign laws;
- increasing the amount of cash available for distribution to unitholders and reducing the Payout Ratio; and
- allowing Alaris to comply with applicable US legislation while maintaining an internal efficiency substantially consistent with Alaris' current structure.
Acumen has provided the Board with its opinion that the consideration to be received by shareholders pursuant to the Arrangement is fair, from a financial point of view, to shareholders (other than Non-Eligible US Shareholders), subject to the assumptions, limitations and qualifications set out in such fairness opinion, as further described in the Circular.
Voting Requirements
To be effective, the Arrangement must be approved by at least 66 2 / 3 % of the votes cast by shareholders attending the virtual Meeting or by proxy, at the Meeting. The Arrangement is also subject to approval by the Toronto Stock Exchange and the Court of Queen's Bench of Alberta . If the Arrangement is approved by the requisite majority of shareholders at the Meeting, the Arrangement is expected to be completed on or about September 1, 2020 . Holders of an aggregate of 1,991,867 Common Shares, including all directors and executive officers, and certain other shareholders of the Corporation, representing approximately 5.6% of the outstanding Common Shares, have indicated their intention to vote all of the Common Shares beneficially owned by them in favour of the Arrangement.
Further Information
Further details with respect to the Arrangement will be included in the Circular which will be mailed to shareholders and filed on SEDAR under Alaris' profile at www.sedar.com on or about July 24, 2020.
ABOUT THE CORPORATION:
Alaris provides alternative financing to private companies (" Partners ") in exchange for distributions with the principal objective of generating stable and predictable cash flows for dividend payments to its shareholders. 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.