Clairvest Group Inc.
TSX : CVG

June 24, 2011 16:34 ET

Clairvest Reports Fiscal 2011 Fourth Quarter and Year-End Results

TORONTO, ONTARIO--(Marketwire - June 24, 2011) - Clairvest Group Inc. (TSX:CVG) today reported results for the quarter and year ended March 31, 2011. (All figures are in Canadian dollars unless otherwise stated).

Highlights
  • March 31, 2011 book value was $302.4 million or $19.65 per share versus $18.57 at December 31, 2010 and $18.32 at March 31, 2010, an increase of 7.26% year over year. Cash or near cash represented 46% of the March 31, 2011 book value, or $8.99 per share
  • Net income for the quarter and for the year was $14.0 million or $0.88 per share and $19.6 million or $1.23 per share respectively
  • The CEP IV Fund pool completed its fundraising with $467 million in committed capital
  • Clairvest, CEP IV, CEP IV-A and co-investors invested a combined US$46.6 million in additional senior secured first lien debt of Centaur, a gaming complex in Indiana
  • Clairvest and CEP exited their investment in Van-Rob, a supplier to the North American auto sector
  • Subsequent to quarter end, Clairvest and CEP III realized US$70 million through the sale of Hudson Valley Waste, a regional solid waste company in the Northeastern United States
  • Clairvest purchased and cancelled 560,871 common shares under its normal course issuer bid for $7.9 million or $14.00 per share, a 29% discount to book value per share at March 31, 2011
  • Subsequent to quarter end, Clairvest declared an annual ordinary dividend of $1.5 million, or $0.10 per share, and a special dividend of $1.5 million, or $0.0965 per share

Clairvest's book value was $302.4 million or $19.65 per share, at March 31, 2011, compared with $18.57 per share at December 31, 2010 and $18.32 at March 31, 2010. The increase in book value per share was attributable to net income and the purchase and cancellation of Clairvest common shares during the quarter. Net income for the quarter and for the year was $14.0 million, or $0.88 per share and $19.6 million or $1.23 per share respectively. The purchase and cancellation of Clairvest common shares added another $0.20 to book value per share.

During the quarter, the Clairvest Equity Partners IV Fund pool, which is comprised of Clairvest, Clairvest Equity Partners IV Limited Partnership ("CEP IV") and Clairvest Equity Partners IV-A Limited Partnership ("CEP IV-A"), completed its fundraising with $467 million in capital commitments, or 117% of the $400 million CEP IV Fund pool target. As part of the final closing, Clairvest increased its commitment to the CEP IV Fund pool by $25 million such that it is investing $125 million alongside the $342 million from third party investors.

As previously announced, Clairvest, CEP IV, CEP IV-A and co-investors invested an additional US$46.6 million in additional senior secured first lien debt ("Senior Debt") of Centaur, LLC ("Centaur"), bringing the total investment to US$114.1 million. Centaur holds various gaming interests including the Hoosier Park Racing & Casino in Indianapolis, Indiana, one of two gaming facilities serving this 1.7 million person Indianapolis area market. Clairvest has entered into an agreement with another holder of Senior Debt to vote together in furtherance of their mutual interest in the ongoing Chapter 11 proceedings for Centaur. Clairvest's portion of the investment made during the quarter was US$8.4 million [C$8.3 million] bringing the total Clairvest investment in Centaur to US$30.0 million [C$30.2 million].

Also as previously announced, Clairvest and CEP completed the sale of their combined interests in Van-Rob Inc. to Kirchhoff Automotive GmbH for proceeds of $35 million. On an initial combined $20.0 million investment, Clairvest and CEP generated a pre-tax return of over 1.8 times invested capital over the life of the investment. Consistent with its ownership percentage, on closing Clairvest realized 25% of this amount, or $8.7 million, on a $5.0 million investment.

Subsequent to quarter end, Clairvest and CEP III sold their interests in Hudson Valley Waste Holding, Inc. to Waste Connections, Inc. for cash proceeds of US$70.0 million. On an initial combined US$35.3 million [C$36.9 million] investment, Clairvest and CEP III generated a pre-tax return of 1.8 times invested capital, after currency conversion. Consistent with its ownership percentage, Clairvest realized 25% of this amount, or C$16.3 million on a C$9.2 million investment.

"We did not exit any investments during the downturn as transaction multiples were depressed," said Jeff Parr, Co-Chief Executive Officer and Managing Director of Clairvest Group Inc. "Instead, we took advantage of compelling valuations to make investments and supported our portfolio companies in making tuck-in acquisitions and infrastructure investments. With the recovery of the M&A environment, we have re-opened our minds to exit opportunities, and exited two investments since the beginning of the calendar year. On these two realizations, we were able to achieve returns superior to that of public market comparables, which we attribute to our approach of providing patient growth capital and helping portfolio companies in becoming strategically significant and attractive targets."

During the quarter, Clairvest purchased and cancelled 560,871 common shares under its normal course issuer bid for a total purchase cost of $7.9 million or $14.00 per share. The purchase represented a 29% discount to book value at March 31, 2011. As at June 24, 2011, Clairvest had purchased and cancelled a total of 6,270,449 common and non-voting shares over the last eight years.

Subsequent to quarter end, Clairvest declared an annual ordinary dividend of $0.10 per share and a special dividend of $0.0965 per share, such that in aggregate, the dividends represent 1% of book value. Both dividends will be payable July 25, 2011 to common shareholders of record as of July 8, 2011 and are eligible dividends for Canadian income tax purposes.

Summary of Financial Results – Unaudited
Financial Performance MeasuresQuarter ended
March 31
Year ended
March 31
2011201020112010
($000's, except per share amounts)$$$$
Net realized gains on corporate investments4,2693,861153
Net unrealized gains on corporate investments9,3311,15316,2497,880
Net income13,9521,87519,5648,497
Basic net income per share0.880.121.230.53
Fully diluted net income per share0.860.111.200.52
Financial Condition Measures - March 3120112010
($000's, except per share amounts)$$
Total assets318,860305,960
Total cash, cash equivalents and temporary investments138,338152,228
Total corporate investments162,177118,881
Total liabilities16,45813,675
Book value per share19.6518.32

Clairvest's annual 2011 financial statements and MD&A are available on the SEDAR website at www.sedar.com and on the Clairvest website at www.clairvest.com.

About Clairvest

Clairvest Group Inc. is a private equity management firm which invests its own capital, and that of third parties through the Clairvest Equity Partners limited partnerships, in businesses that have the potential to generate superior returns. In addition to providing financing, Clairvest contributes strategic expertise and execution ability to support the growth and development of its investee partners. Clairvest realizes value through investment returns and the eventual disposition of its investments.

Forward-looking Statements

This news release contains forward-looking statements with respect to Clairvest Group Inc., its subsidiaries, CEP, CEP III, CEP IV, CEP IV-A and their investments. These statements are based on current expectations and are subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Clairvest, its subsidiaries, CEP, CEP III, CEP IV and CEP IV-A and their investments to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general and economic business conditions and regulatory risks. Clairvest is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or otherwise.

www.clairvest.com

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