Alaris Equity Partners Income 6 25 Senior Unsecured Debentures T.AD.DB.A

Alternate Symbol(s): ADLRF | T.AD.UN

Financial Services Asset Management

Alaris Equity Partners Income Trust (the Trust) is a Canada-based trust. The Trust’s operations consist of investments in private operating entities, typically in the form of preferred or common limited partnership interests, preferred or common interest in limited liability corporations in the United States, and loans receivable. The Trust’s Canadian investments are made through a wholly owned Canadian corporation, Alaris Equity Partners Inc. and its American investments are made through two Delaware corporations, Alaris Equity Partners USA Inc., Salaris USA Royalty Inc., and their subsidiaries.

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Alaris Equity Partners Income 6 25 Senior Unsecured Debentures

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Post by retiredcfon Sep 06, 2023 3:57pm

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Post# 35622579

RBC

Long term investor and previously a shareholder. At a price of $15.00 and given the dividend (which I agree looks to be sustainable), I decided that it was time to tiptoe back in. GLTA

August 31, 2023

Alaris Equity Partners Income Trust
Announces US$59.5MM investment in The Shipyard

TSX: AD-U | CAD 15.29 | Sector Perform | Price Target CAD 18.00

Sentiment: Neutral

Summary: Alaris announced a US$59.5MM investment in The Shipyard, LLC ("TSY"), consisting of US$42.5MM in preferred equity and US$17.0MM in common equity. If TSY achieves certain financial targets, Alaris would invest an additional US$5.5MM into TSY's preferred equity under the same terms as the initial investment.

Alaris indicated the US$42.5MM of preferred equity would have an annualized distribution of US$5.95MM (14% yield), of which TSY can elect to defer distributing up to 3% of the distribution yield (US$1.28MM in the first year) and the deferred distribution would compound at the distribution yield. The preferred equity has an annual reset based on net revenue growth and capped at 7%. Alaris indicated TSY is expected to have an earnings coverage ratio between 1.2x - 1.5x.

TSY is an integrated marketing agency based in Columbus, Ohio, with 160 employees and focus on servicing customers in tourism, financial services, energy and retail sectors. TSY will use the proceeds from the investment to provide a partial liquidity event for its existing shareholders.

Our view: We view the investment as incrementally positive for Alaris earnings growth and think additional capital deployment would be positive for its share price. Although we remain concerned by the macro backdrop and the potential impact on Alaris' various investment partners should the macro environment worsen, we think Alaris has done a good job of growing and diversifying its investment portfolio over time.