Alaris Royalty Corp.

Alaris Royalty Corp.

April 27, 2010 15:15 ET

Alaris Royalty Corp. Increases Diversification and Revenues With Addition of New Partner

CALGARY, ALBERTA--(Marketwire - April 27, 2010) - Alaris Royalty Corp. ("Alaris" or the "Corporation") (TSX:AD) is pleased to announce that it has successfully negotiated a new partnership agreement (the "Agreement") with KMH Cardiology Centres Incorporated ("KMH") to form the KMH Limited Partnership (the "Partnership"). Based in Mississauga, Ontario, KMH is one of Canada's leading providers of diagnostic services including nuclear medicine, cardiology and MRI diagnostics. KMH is the largest provider of nuclear cardiology services in North America and is the third largest independent health facility in Canada based on revenues. KMH has 8 diagnostic centres in Ontario and is currently opening four additional centres in Maryland, USA. Under the terms of the Agreement, Alaris will be contributing a total of $5,000,000 in cash ($3,000,000 of which was advanced on formation of the Partnership) in exchange for non-voting preferred units in the Partnership. Similar to its transactions with Alaris' other partners, the preferred units entitle Alaris to receive an annual preferred distribution in priority to holders of other units in the Partnership. For the first twelve months of the Partnership, Alaris' distribution represents an expected 17.5% first year return on contributed cash. The preferred distribution will be adjusted annually based on the change in same clinic revenues of KMH's Canadian operations, which have been over 6% in the past two years.

"We are very excited to be adding such a strong partner as KMH" said Alaris President and CEO Steve King. "KMH is a very stable but growing business and is uniquely suited to partner with Alaris as a means to grow its business rapidly. We look forward to funding KMH frequently in the future much like what we have done so successfully with LifeMark Health" said King.

"As a result of this new partnership with Alaris, KMH is well positioned to take advantage of many growth opportunities available to us because of our reputation in setting standards and quality of service. We are looking forward to having a long and successful partnership with Alaris" said Neena and Vijay Kanwar Co-founders of KMH.

About Alaris:

Alaris provides alternative financing to the Private Company Partners in exchange for royalties or distributions with the principal objective of generating stable and predictable cash flows for dividend payments to its shareholders. Royalties or distributions from the Private Company Partners are structured as a percentage 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.

Forward-Looking Statements

Alaris' public communications often include written or oral statements which contain forward-looking information. Statements of this type are included in this news release and may be included in our other filings with Canadian securities regulators, or in our other communications. 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 of such words. All such statements are made pursuant to the applicable provisions of, and are intended to be forward-looking statements under applicable Canadian securities legislation. Statements containing forward-looking information include, but are not limited to, comments with respect to Alaris' expected distributions from the new partnership with KMH as well as the intention to provide additional funding to KMH in the future.

By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. Alaris has assumed that KMH will continue to grow and add to its business, and will continue to increase its cash flow and earnings, which will be favourable to Alaris. Alaris is also assuming that any changes to the economy, health care industry or regulations on the health care industry will not adversely affect KMH's business. These assumptions are material factors considered in when setting the outlook for Alaris' partnership with KMH.

There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur. Forward-looking statements are subject to risks, uncertainties and assumptions and should not be read as guarantees or assurances of future performance. The actual results of the Alaris and KMH could materially differ from those anticipated in the forward-looking statements contained herein as a result of certain risk factors, including, but not limited to, the following: general economic conditions; failure to complete or realize the anticipated benefit of Alaris' financing arrangement with KMH; government regulations; and risks relating to the KMH and its business. Accordingly, readers are cautioned not to place undue reliance on any forward-looking information contained in this news release. 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 expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. The foregoing lists are not intended to be exhaustive.

Contact Information

  • Alaris Royalty Corp.
    Curtis Krawetz
    Investor Relations