Mr. Gregg Delcourt reports

ALARIS EQUITY PARTNERS ANNOUNCES THE REDEMPTION OF FNC TITLE SERVICES

Alaris Equity Partners Income Trust has completed the redemption of Alaris's interest in Falcon Master Holdings LLC, doing business as FNC Title Services, which closed on Oct. 1, 2022, and resulted in gross proceeds to Alaris of $58.3-million (U.S.) ($77-million), consisting of: (i) $48.6-million (U.S.) for the redemption of all of Alaris's preferred equity (which includes $5.2-million (U.S.) for distributions (the make-whole distributions) owed up to the third-anniversary date of Alaris's initial investment); and (ii) $9.7-million (U.S.) for the purchase of Alaris's investment in the common equity of FNC (which includes $1.4-million (U.S.) of the FNC proceeds that Alaris agreed to escrow in connection with the FNC redemption to cover potential indemnification obligations). The cost basis of the preferred equity was $32.15-million (U.S.) and of the common equity was $7.85-million (U.S.).

Alaris's total return on its FNC investment, including the preferred and common equity distributions, is $29.9-million (U.S.), or 75 per cent, which represents an unlevered IRR (internal rate of return) of approximately 42 per cent, consisting of an approximately 43-per-cent IRR for its preferred equity investment and a 38-per-cent IRR for its common equity investment, in FNC.

After today's announcements, Alaris will have approximately $217-million drawn on its senior credit facility and $233-million available for investment purposes based on the recently amended and extended credit agreement, which now provides for up to $450-million of indebtedness, while the total senior debt to EBITDA (earnings before interest, taxes, depreciation and amortization) on a pro forma basis is approximately 1.5 times. Alaris estimates its run-rate payout ratio to be between 65 per cent and 70 per cent following the FNC redemption.

"We are excited to show some early returns from our common equity strategy that we started three years ago. The addition of common equity helped us win this deal originally and has helped contribute to an incredible return two years later. Congratulations and thank you to the team at FNC for a tremendous outcome," said Gregg Delcourt, chief investment officer of Alaris.

About Alaris Equity Partners Income Trust

Alaris, through its subsidiaries, provides alternative financing to private companies (partners) in exchange for distributions, dividends and interest with the principal objective of generating stable and predictable cash flows for dividend payments to its unitholders. Distributions from the partners are adjusted each year based on the percentage change 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.

We seek Safe Harbor.