TORONTO, June 22, 2017 (GLOBE NEWSWIRE) -- Clairvest Group Inc. (TSX:CVG) today reported results for the quarter and year ended March 31, 2017 and material events which occurred subsequent to year end. (All figures are in Canadian dollars unless otherwise stated)
Highlights
- March 31, 2017 book value was $550 million or $36.21 per share versus $35.08 per share at December 31, 2016 and $31.91 per share at March 31, 2016, an increase of $4.30 per share over the last twelve months
- Net income for the quarter and for the year was $17 million or $1.14 per share and $70 million or $4.61 per share respectively
- Clairvest and Clairvest Equity Partners IV (“CEP IV”) completed the sale of Cieslok Media Inc. (“Cieslok Media”) and realized 8.4 times invested capital. In June 2017, Clairvest was announced winner of the 2017 CVCA Deal of the Year award for its investment in Cieslok Media
- Subsequent to quarter end, Clairvest and Clairvest Equity Partners V (“CEP V”) invested US$74 million in Head InfoTech India Pvt. Ltd. (“Head Infotech”), with Clairvest’s share being C$56 million; In June, this company experienced a material adverse regulatory development
- Subsequent to quarter end, Clairvest and Clairvest Equity Partners III (“CEP III”) completed the sale of Lyophilization Services of New England, Inc. (“LSNE”) for cash proceeds of up to C$110 million versus a cost of C$30 million
- Subsequent to quarter end, Clairvest and CEP IV made additional investments totaling $4 million in Discovery Air Inc.
- Subsequent to quarter end, Clairvest declared an annual ordinary dividend of $1.5 million, or $0.10 per share, and a special dividend of $4.0 million, or $0.2621 per share, both payable on July 24, 2017
Clairvest’s book value was $550.2 million or $36.21 per share at March 31, 2017, compared with $532.9 million or $35.08 per share at December 31, 2016, and $485.5 million or $31.91 per share at March 31, 2016. The increase in book value per share for the quarter was attributable to net income for the quarter of $17.3 million, or $1.14 per share. For the year ended March 31, 2017, net income was $70.1 million or $4.61 per share.
At March 31, 2017, Clairvest had $714.4 million of capital available for future acquisitions through treasury funds, credit facilities, access to funds in its acquisition entities and uncalled committed capital in various Clairvest Equity Partnerships (the “CEP Funds”).
During the fourth quarter of fiscal 2017, Clairvest and CEP IV sold its interest in Cieslok Media, an outdoor advertising company operating large format digital and static billboards across major cities in Canada. Clairvest’s portion of the investment in Cieslok Media was made by CEP IV Co-Investment Limited Partnership (“CEP IV Co-Invest”), which received proceeds totaling $33.4 million versus a cost of $4.0 million. Over the 3-year investment horizon, Cieslok Media generated 8.4 times invested capital, or a 92% IRR for Clairvest and CEP IV. In June 2017, Clairvest was announced winner of the 2017 CVCA Deal of the Year award for its investment in Cieslok Media.
In April 2017, Clairvest, CEPV and other co-investors invested US$73.7 million (C$99.2 million) in Head Infotech, with Clairvest’s portion of the investment being $56.0 million. Head Infotech operates an on-line, skill based gaming platform in India providing online experience of Rummy. In June 2017, a material adverse regulatory development occurred with respect to this investment. The impact to the fair value of this investment is currently uncertain and potentially material.
Clairvest and CEP III completed the sale of LSNE in April 2017 for cash proceeds of up to C$110 million. Clairvest’s portion of the investment in LSNE was made by CEP III Co-Investment Limited Partnership (“CEP III Co-Invest”), which realized proceeds over the life of the investment, net of foreign exchange hedges, of C$26.2 million against an investment of C$7.5 million. As at March 31, 2017, LSNE is carried at the estimated sale proceeds which have since been substantially received.
Subsequent to quarter end, Clairvest, CEP IV and other co-investors in Discovery Air (collectively the "Discovery Air Investor Group") made additional investments in Discovery Air by purchasing of all outstanding common shares of Discovery Air held by public shareholders and advancing additional loans to Discovery Air Defence Service Inc. (“DA Defence”), a subsidiary of Discovery Air. CEP IV Co-Invest’s portion of the investments included $0.4 million towards the purchase of common shares and $4.0 million in loans to DA Defence.
Subsequent to quarter ended March 31, 2017, Clairvest declared an annual ordinary dividend of $0.10 per share and a special dividend of $0.2621 per share, such that in aggregate, the dividends represent 1% of the March 31, 2017 book value. Both dividends will be payable July 24, 2017 to common shareholders of record as of July 6, 2017 and are eligible dividends for Canadian income tax purposes.
Summary of Financial Results – Unaudited
| Financial Results(1) | Quarters ended March 31 | Years ended March 31 | ||
| 2017 | 2016 | 2017 | 2016 | |
| ($000’s, except per share amounts) | $ | $ | $ | $ |
| Net investment gains | 17,173 | 14,523 | 72,946 | 38,079 |
| Net carried interest income – realized and unrealized changes | 10,444 | 8,217 | 35,617 | 16,255 |
| Distributions, interest income, dividends and fees | 5,826 | 5,416 | 22,907 | 21,583 |
| Total expenses, excluding income taxes | 14,528 | 9,626 | 51,870 | 32,690 |
| Net income and comprehensive income | 17,268 | 17,265 | 70,126 | 39,966 |
| Basic and fully diluted net income per share | 1.14 | 1.14 | 4.61 | 2.63 |
| Financial Position | March 31, 2017 | March 31, 2016 |
| ($000’s, except share information and per share amounts) | $ | $ |
| Total assets(1) | 671,951 | 570,191 |
| Total cash, cash equivalents and temporary investments(1) | 122,169 | 87,043 |
| Unrealized carried interest from the CEP Funds(1) | 98,322 | 64,009 |
| Corporate investments, at fair value(1) | 410,102 | 353,801 |
| Total liabilities(1) | 121,747 | 84,670 |
| Management participation(1) | 67,050 | 43,977 |
| Book value(2) | 550,204 | 485,521 |
| Common shares outstanding | 15,194,095 | 15,214,095 |
| Book value per share(2) | 36.21 | 31.91 |
(1) Under IFRS, the Company is required to fair value certain acquisition entities and wholly-owned holding entities and record them as corporate investments. The Company is also required to recognize as revenue that portion of the carried interest from the CEP Funds which are allocated to the principals and employees of Clairvest through various limited partnerships which are controlled by Clairvest. In addition, Clairvest is required to record a liability for any entitlements of limited partners of a partnership where the limited partners are not part of the consolidated group of the Company but where the partnership is required to be consolidated by the Company. Accordingly, that portion of the carried interest from the CEP Funds that is allocated to the limited partners of these partnerships (“MIP Partnerships”) and the carried interest payable to MIP Partnerships by other partnerships which are consolidated by Clairvest (collectively, the “Management participation”) are recorded as an expense and a liability of the Company.
(2) Book value is a Non-IFRS measure calculated as the value of total assets less the value of total liabilities. The term book value does not have any standardized meaning according to IFRS and therefore may not be comparable to similar measures presented by other companies. There is no comparable IFRS measure presented in Clairvest’s consolidated financial statements and thus no applicable quantitative reconciliation for such non-IFRS financial measure. The Company has calculated book value consistently for many years and believes that book value can provide information useful to its shareholders in understanding its performance, and may assist in the evaluation of its business relative to that of its peers.
Clairvest’s annual fiscal 2017 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 investor which invests its own capital, and that of third parties through the Clairvest Equity Partners (“CEP”) 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, its CEP limited partnerships 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, its CEP limited partnerships 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.