Mr. Steve King reports

ALARIS ANNOUNCES NEW INVESTMENTS AND A 9% DISTRIBUTION INCREASE

Alaris Equity Partners Income Trust recently completed three investments totalling $52.7-million (U.S.), contributing an incremental $6.6-million (U.S.) or 4.3-per-cent growth to Alaris's run rate partner distributions. The investments include a $27.0-million (U.S.) initial investment in McCoy Roofing Holdings LLC, a leading provider of residential roofing services based in Omaha, Neb., as well as follow-on investments into existing partners, including Cresa LLC and Carey Electric Contracting Inc. In addition, Alaris's long-standing partner, Ohana Growth Partners LLC, completed the acquisition of a Planet Fitness franchisee based in Michigan and Wisconsin with 10 locations.

On the back of the new investments announced today, strength within Alaris's existing partner base and lower than target payout ratio, Alaris is pleased to announce that its board of trustees has approved a 9-per-cent increase to the distribution, while the payout ratio remains below the trust's 65-per-cent to 70-per-cent target. This increase brings the quarterly distribution to 37 cents per trust unit and the annual distribution to $1.48.

"We are excited to welcome McCoy to our growing portfolio and honoured to be able to support the growth of our existing partners Cresa, Carey and Ohana," commented Steve King, president and chief executive officer of Alaris. "Since our founding in 2004, we have invested in 43 portfolio companies, providing our partners with over $2.9-billion in capital, generating a 16-per-cent IRR from exited investments and returning over $800-million to unitholders though distributions and unit buybacks. 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," continued Mr. King.

"In addition, with today's announcement we continue to grow our common equity portfolio, enabling the trust to provide the opportunity for enhanced returns to our unitholders. With the addition of McCoy, we now have common equity holdings in 15 of our partners and are excited that Alaris and our unitholders are now positioned to more fully participate in the significant value creation that our partners are building within their businesses," added Mr. King.

"As we look forward, we remain confident in our ability to continue our strong growth track record, as our pipeline of new investment opportunities remains strong and the potential for continued distribution increases from our partners remains positive. As a result of the strength across our business, coupled with our payout ratio being below our target range, I am pleased to announce that we are increasing our distribution. As we go forward, we will look to continue using our capital to fund our growth while returning excess cash to unitholders through potential future distribution increases and buybacks," concluded Mr. King.

McCoy Roofing

Founded in 2007 and headquartered in Omaha, Neb., McCoy Roofing is a leading provider of roofing and storm restoration services across the Midwest. While McCoy's services are primarily centred on residential insurance restoration projects resulting from severe weather, the company also brings extensive expertise in roofing, gutters, siding, windows and doors. Unlike other segments of residential contracting, residential insurance restoration is driven by weather patterns that routinely cause property damage requiring non-discretionary and time-sensitive demand for replacement services. With a strong reputation for quality and customer service, McCoy has expended into multiple regional markets, including Omaha, Lincoln, Des Moines, Sioux Falls and beyond.

Alaris's investment, through Alaris USA, consists of $19.0-million (U.S.) of preferred equity and $8-million (U.S.) in common equity. The preferred equity investment provides Alaris with an initial annualized distribution of $2.7-million, translating into a pretax annualized yield of 14 per cent. The distribution is set to be adjusted annually based on the percent change in McCoy's annual net revenue, subject to a collar of 7 per cent.

If McCoy successfully achieves its growth and profitability targets, Alaris has agreed to finance up to an additional $32.0-million (U.S.) of preferred equity over two tranches, with the same initial annualized yield and rights. Proceeds of the McCoy Investment were used to provide a partial liquidity event to equity holders.

"We chose Alaris because of their proven track record of success and their unique approach that allows us to retain majority ownership while gaining a true partner to help us scale and grow -- without compromising our culture. Their integrity and values align perfectly with ours, and we couldn't be more excited about the future with Alaris as our partners," said Landon Wrinkle and Lee McCoy, co-owners, McCoy Roofing.

Follow-on investments -- Cresa and Carey

Alaris is excited to announce that it has invested an additional $20.5-million (U.S.) in Cresa, bringing the trust's total investment to $50.5-million (U.S.). The most recent investment will result in a 69-per-cent increase in Cresa's annualized distribution, up to $7.1-million (U.S.) from $4.2-million (U.S.) effective. The proceeds from this investment will be used to finance a strategic acquisition that provides the company with a strong recurring revenue portfolio, proprietary technology platform and scale as a leading tenant only focused real estate advisory firm.

In addition, Alaris has invested an additional $5.2-million (U.S.) in Carey with proceeds used to provide liquidity to a shareholder of the business. Following this investment the trust's preferred equity investment has increased to $14.5-million (U.S.) while the common equity investment has increased to $4.7-million (U.S.). Alongside this investment, Carey's annualized distribution has increased by 16 per cent to $2.2-million (U.S.) from $1.9-million (U.S.).

Corporate partner update

Across the trust's portfolio, performance reflects a balanced mix of growth and resilience, with several notable developments. Alaris's long-time partner, Ohana recently completed the acquisition of a Planet Fitness franchisee operating 10 Planet Fitness clubs in Michigan and Wisconsin. The acquisition strengthens Ohana's competitive position and cash flow, and provides it access into two new markets, positioning Ohana well for continued growth. Alaris supported the Ohana management team with the successful completion of the acquisition, however it was fully financed through Ohana's balance sheet. On the back of Ohana's expansion into Michigan and Wisconsin, this acquisition is expected to significantly enhance the return profile of Alaris's common equity ownership in Ohana over the course of the trust's investment period. The acquisition brings Ohana's total club count to 94 with clubs in Maryland, Washington, Tennessee, Floria, D.C., California, Michigan and Wisconsin.

In addition, Edgewater Technical Associates LLC secured a significant multiyear government contract which is expected to accelerate its already impressive revenue growth rate, further enhancing visibility and supporting long-term value creation. Fleet Advantage LLC was recently awarded a number of new contracts awarded, including a new customer relationship that further diversifies its revenue base and strengthens future cash flow potential. GWM Holdings Inc. continues to face headwinds as larger customers moderate spending and sector-wide pressures persist. These conditions are placing pressure on profitability and cash flows, and management is focused on revenue capture, pipeline conversion and cost discipline to stabilize performance. Meanwhile, Federal Management Partners LLC remains on track with its recovery plan, though progress has been temporarily impacted by the current government shutdown.

Over all, Alaris's diversified portfolio remains well positioned for continued growth and value creation, supported by strong partner execution, expanding customer relationships and a resilient foundation for long-term returns.

About Alaris Equity Partners Income Trust

The trust, through its subsidiaries, invests in a growing and diversified group of private businesses primarily through structured equity. The trust's strategy is designed to deliver stable and predictable returns to unitholders while driving long-term value creation. In addition to generating steady cash distributions, Alaris aims to capture capital appreciation as its partners expand. This growth-focused approach is further enhanced by common equity positions, which align the trust's interests with those of the founders and allow Alaris to participate in the upside of their continued success.

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