Alaris Announces New Investments And a 9% Distribution Increase
Executive Summary
- Alaris Equity Partners completed three new investments totaling US $52.7 million, adding US $6.6 million (4.3%) to its run‑rate partner distributions.
- The Board approved a 9% quarterly distribution increase to $0.37 per unit ($1.48 annualized) reflecting the lower‑than‑target payout ratio.
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Significant capital allocations were made to:
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McCoy Roofing Holdings – US $27.0 million (US $19.0 m preferred equity, US $8.0 m common equity) with an initial annualized distribution of $2.7 million and up‑to US $32.0 million optional follow‑on preferred equity.
- Cresa LLC – additional US $20.5 million (total investment now US $50.5 million), boosting its annualized distribution by 69% to $7.1 million.
- Carey Electric Contracting – additional US $5.2 million, raising preferred equity to US $14.5 million and common equity to US $4.7 million; annualized distribution up 16% to $2.2 million.
Key Details
- McCoy Roofing Investment
- Preferred equity: US $19.0 m, initial annualized distribution $2.7 m (pre‑tax yield 14%).
- Common equity: US $8.0 m.
- Distribution adjusted annually based on McCoy’s net revenue change, with a 7% collar.
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Optional up‑to US $32.0 m additional preferred equity in two tranches if growth targets are met.
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Cresa Follow‑On Investment
- Additional US $20.5 m invested (total US $50.5 m).
- Annualized distribution increased from $4.2 m to $7.1 m (+69%).
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Proceeds earmarked for a strategic acquisition to expand recurring‑revenue portfolio and technology platform.
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Carey Follow‑On Investment
- Additional US $5.2 m invested.
- Preferred equity now US $14.5 m; common equity now US $4.7 m.
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Annualized distribution raised from $1.9 m to $2.2 m (+16%).
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Ohana Growth Partners Acquisition (partner update)
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Completed acquisition of a Planet Fitness franchisee with 10 clubs in Michigan & Wisconsin, raising Ohana’s total club count to 94 across multiple states.
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Distribution Increase
- Quarterly distribution raised 9% to $0.37 per trust unit; annualized distribution now $1.48 per unit.
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Payout ratio remains below the target range of 65‑70%.
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Overall Portfolio Outlook
- New and follow‑on investments increase Alaris’ common equity holdings to 15 partners.
- Management expects continued growth pipeline, potential further distribution hikes, and possible share buybacks.
Notable Quotes
“We are excited to welcome McCoy to our growing portfolio… The significant success that we have seen over the past 21 years has set us up to capitalize on continued growth within our segment of the $3 trillion North American private equity market.” – Steve King, President & CEO, Alaris
“We chose Alaris because of their proven track record… we couldn’t be more excited about the future with Alaris as our partners.” – Landon Wrinkle & Lee McCoy, Co‑Owners, McCoy Roofing.