Alaris's Double Play: Fueling Record Growth with Strategic Capital

CALGARY, AB – December 01, 2025

Alaris Equity Partners (TSX:AD.UN) has executed a formidable one-two punch to close out a record-breaking year, announcing a significant capital raise alongside a strategic expansion into the U.S. healthcare market. The firm successfully launched a bought deal offering of convertible debentures, ultimately upsized to $92 million due to strong investor appetite, while simultaneously deploying US$30 million into a new partner, Renew Medical Group. This dual maneuver not only fortifies Alaris's balance sheet but also signals an aggressive and confident strategy to fuel its pipeline and expand its portfolio of high-yielding private company investments.

The move caps a banner year for the Calgary-based trust, which has now deployed approximately $385 million in capital year-to-date—a new record. By securing flexible, long-term financing and immediately putting capital to work in a resilient, high-growth sector, Alaris is reinforcing its unique investment model, which promises stable returns for unitholders through a combination of predictable distributions and long-term capital appreciation.

The Financial Power Play: A $92 Million War Chest

At the heart of Alaris’s recent strategy is a masterfully executed financing operation. The Trust initially went to market with an $80 million offering of 6.50% convertible unsecured senior debentures. However, citing “excess demand,” the syndicate of underwriters, led by National Bank Financial Inc. and CIBC World Markets Inc., fully exercised their over-allotment option, bringing the total gross proceeds to a substantial $92 million.

This strong market reception is a powerful vote of confidence in Alaris's financial management and future prospects. The debentures, maturing on June 30, 2030, provide the firm with long-term capital at a fixed rate. The proceeds are earmarked to pay down its revolving senior credit facility, a move that may seem counterintuitive but is strategically astute. By clearing this facility, Alaris effectively reloads its primary tool for funding future investments, creating significant “dry powder” that can be drawn upon quickly to seize new partnership opportunities as they arise.

This maneuver significantly enhances the company’s financial flexibility while maintaining a healthy balance sheet. Recent figures show Alaris has impressively reduced its debt-to-equity ratio from over 45% to just 13.2% in the last five years. Furthermore, with earnings before interest and taxes (EBIT) covering its interest payments by more than 25 times, the company is in a robust position to service its debt obligations. The convertible nature of the debentures, which allows holders to convert them into Alaris units at a price of $27.00 per unit, offers potential upside for investors while representing a manageable source of future equity dilution for the Trust, a common trade-off for growth-oriented financing.

A Strategic Bet on Healthcare's Future

Demonstrating its deployment-ready strategy, Alaris immediately put capital to work with a US$30 million investment in Renovo Medical Group, LLC, operating as Renew Medical Group. Renew provides outsourced physician services—including anesthesia, radiology, and critical care—to hospitals and surgical centers across the United States. This sector is a critical component of the modern healthcare ecosystem, helping facilities improve efficiency, manage persistent labor shortages, and reduce costs without sacrificing patient care.

The U.S. healthcare staffing market is a behemoth, estimated at nearly US$20 billion in 2024 and projected to grow at a compound annual growth rate (CAGR) of over 5.7% for the next decade. Factors like an aging population, physician burnout, and the increasing complexity of hospital management are fueling relentless demand for the exact services Renew provides. Alaris is tapping into a non-cyclical growth industry that is essential to the functioning of the U.S. healthcare system.

“We’re very excited to add Renew Medical as our 23rd partner and our 17th common-equity partner,” commented Steve King, President and CEO of Alaris. “The Renew team have used their years of experience to build an incredible company that is providing an essential service to hospitals. Renew’s strong growth, free cash flow generation and debt-free balance sheet is the ideal partner for Alaris and our unit holders.”

The investment is structured in classic Alaris fashion: US$26.5 million in preferred equity and US$3.5 million in common equity. This hybrid approach secures a strong, predictable cash flow stream while allowing Alaris to participate in the long-term value creation of its partner. The preferred equity provides an initial pre-tax annualized yield of 14%, a rate that outpaces Alaris’s portfolio average and promises an immediate and accretive impact on its distributable cash.

The Alaris Model: Balancing Stability with Growth

These recent moves are a textbook execution of the Alaris investment philosophy. The Trust operates not as a traditional private equity firm seeking majority control and quick exits, but as a long-term, non-control partner. It provides capital to successful, profitable private businesses, allowing founders and management teams to retain operational control while gaining a financial partner for growth, succession planning, or shareholder liquidity.

The Renew investment is a perfect fit for this model. As a profitable, debt-free company with a strong management team in a resilient industry, it represents the ideal Alaris partner. The structure of the deal—primarily preferred equity distributions with a common equity kicker—aligns the interests of both parties. Alaris receives stable cash flows to pass on to its unitholders, while Renew gets the capital and strategic support to continue its growth trajectory.

Connecting the debenture offering with the Renew investment illustrates the symbiotic nature of Alaris's strategy. The capital markets provide the fuel, and the disciplined investment team identifies the high-performance engines to add to its portfolio. This record-setting $385 million deployment in 2025 demonstrates that the model is not just working but accelerating, creating a diversified and expanding base of cash-flow-generating assets.

Of course, no investment is without risk. The U.S. healthcare landscape is a complex web of regulations, with bodies like the Centers for Medicare & Medicaid Services (CMS) and various state medical boards wielding significant influence over reimbursement and compliance. Operational challenges, including physician retention and maintaining quality of care amidst widespread staffing shortages, are persistent. However, the defensive nature of healthcare spending and the essential service provided by companies like Renew offer a substantial buffer against economic volatility. Alaris’s track record is built on partnering with management teams capable of navigating such complexities, turning industry challenges into growth opportunities.