Target Information

Alaris Equity Partners Income Trust, located in Calgary, Alberta, is engaged in providing alternative financing to private companies in exchange for distributions, dividends, and interest. For the fiscal year 2021, Alaris successfully deployed a total of CDN$359 million, reinforcing its commitment to delivering stable and predictable cash flows for its unitholders.

In its latest transactions, Alaris has invested US$55 million into existing partners, including Fleet Advantage LLC, GWM Holdings Inc. and affiliates, and Body Contour Centers LLC. These investments, which closed prior to December 31, 2021, underline Alaris’ strategy of partnering with companies across various sectors to foster growth and meet the evolving needs of the markets.

Industry Overview

The Canadian alternative financing market is expanding as companies are increasingly seeking flexible capital solutions. This trend is driven by small to medium-sized enterprises that often face challenges in securing traditional bank loans. With the rise of fintech firms, the industry is becoming more competitive, pushing established firms like Alaris to adapt and innovate.

Moreover, the healthcare and wellness space, underscored by Body Contour Centers' performance, continues to show robust growth. The increasing focus on health and aesthetic services is elevating the demand for financing solutions tailored to these sectors. With the population aging and becoming more health-conscious, the opportunity for alternative financing in this field is promising.

In the technology sector, represented by GWM, the programmatic media industry is witnessing significant growth. The sector, focused on automated ad buying and selling, is projected to expand rapidly over the next five years, providing a strong backdrop for investment. As advertising budgets shift towards digital platforms, companies like GWM are ideally positioned to capture this momentum and enhance their market share.

Rationale Behind the Deal

The rationale for Alaris's recent investments is rooted in the desire to strengthen its portfolio by backing businesses that demonstrate solid growth trajectories and align with emerging market trends. By investing additional capital in Fleet Advantage and GWM, Alaris aims to solidify its position in two rapidly evolving industries: fleet financing solutions and programmatic media.

Furthermore, the additional funds allocated to Body Contour Centers enhance Alaris' exposure to the growing healthcare and wellness market, particularly as BCC hits performance milestones that validate its growth strategy. These strategic investments collectively aim to optimize Alaris’ distribution capabilities and ensure long-term financial stability.

Investor Information

Alaris Equity Partners is a sophisticated investor focusing on private equity, providing capital mainly to private companies that are well-managed and exhibit a robust potential for growth. The Trust offers a unique blend of preferred equity and common equity investments, enabling a diversified revenue stream through distributions.

The firm prides itself on collaboration with its partners to enhance capital allocation and secure sustainable growth. By creating a transparent and flexible investment structure, Alaris aims to maximize returns for its unitholders while supporting the businesses it invests in through strategic guidance and financial support.

View of Dealert

From an expert perspective, Alaris's current investment strategy reflects a highly calculated approach to growth in a landscape rife with opportunity. The additional investments in Fleet, GWM, and BCC not only indicate confidence in these sectors but also align with broader market trends favoring alternative financing, technology enhancement, and health and wellness services.

Given the high yield associated with the new preferred units in Fleet and anticipated dividends from GWM’s common equity, these investments are poised to deliver strong returns. Additionally, the structure of these investments, including the payment-in-kind feature, provides essential flexibility, enabling Alaris to support its partners while maintaining liquidity.

Overall, this series of investments positions Alaris favorably in a dynamic environment. By focusing on companies with proven potential and favorable market reception, Alaris is not only mitigating risk but is also capitalizing on growth opportunities that are expected to provide substantial returns in the long run.

View Original Article