Clairvest Announces Fourth Quarter and Year End 2022


TORONTO, June 27, 2022 (GLOBE NEWSWIRE) — Clairvest Group Inc. (TSX: CVG) today announced its results for the fourth quarter and fiscal year ended March 31, 2022 and significant events occurring after the end of the ‘exercise. (All figures are in Canadian dollars unless otherwise stated)

Strong points

  • Carrying value as of March 31, 2022 was $1,179.1 million or $78.33 per share, compared to $972.1 million or $64.58 per share as of December 31, 2021 and $56.96 per share. share as of March 31, 2021
  • Net income for the fourth quarter was $207.0 million or $13.75 per share, due to significant valuation changes in Clairvest Equity Partners V (“CEP V”) investment portfolios ) and Clairvest Equity Partners VI (“CEP VI”).
  • Net income for fiscal 2022 was $330.2 million or $21.93 per share
  • Book value per share increased 39% in fiscal 2022
  • Stem, Inc. (NYSE:STEM) completes the acquisition of Also Energy, generating for Clairvest and CEP V a ​​cash yield of 9.1x plus a cumulative interest in STEM which equals 0.8x our incremental investment for a total return of 9.9x, using the month of March. 31 book value of STEM stocks
  • Clairvest and CEP V holding company, Head Digital Works, have won material court victories, reopening some markets and increasing regulatory clarity for India’s rapidly expanding skill-based online gambling industry
  • Subsequent to the end of the year, Clairvest and CEP V entered into a definitive agreement to partially realize their stake in Meriplex Communications
  • Subsequent to year-end, Clairvest and holding company CEP VI NovaSource Power Services entered into a definitive agreement for a US$100 million capital increase at a premium to March 31 book value
  • After the end of the year, Clairvest announced the addition of William F. Morneau to its board of directors
  • Subsequent to year-end, Clairvest declared an annual dividend of $1.5 million, or $0.10 per share, and a special dividend of $10.3 million, or $0.6833 per share, both payable on July 28, 2022.

Clairvest’s book value was $1,179.1 million or $78.33 per share as of March 31, 2022, compared to $972.1 million or $64.58 per share as of December 31, 2021 and 857.8 million or $56.96 per share as at March 31, 2021. temporary investments excluding marketable securities, as presented under IFRS, amounted to $349 million. In addition, our acquiring entities held $80 million in cash and cash equivalents as of March 31, 2022, bringing total available cash to $429 million. In total, this represented 36% of our book value as of March 31, 2022, or approximately $28 per share.

Net income for the fourth quarter was $207.0 million, or $13.75 per share. Net income for the fourth quarter of fiscal 2022 reflects a net increase in the fair value of Clairvest’s investee companies and a corresponding increase in deferred interest from CEP funds, reflecting developments in various holding companies, as described below.

Net income for the year was $330.2 million or $21.93 per share. Net investment gain for the year was $355.6 million, of which $94.6 million was a net realized gain resulting primarily from the sale of Also Energy, as described below. During the year, 6,100 shares were purchased and canceled under the Company’s normal course issuer bid for a total purchase price of $0.4 million, or at an average price of $57.38 per share.

In February 2022, Clairvest and CEP V completed the sale of their stake in Also Energy for an invested capital of 9.9 times with an IRR of 86% over the 5-year holding period of its investment, calculated on the basis of the cash product received and of the month of March. 31 2022 carrying amount of share consideration received on sale. Clairvest received cash proceeds of US$82.4 million and 1,091,583 STEM shares upon the sale of its stake for total invested capital of US$9.0 million. In addition, the advanced promissory note to Also Energy was fully repaid at closing.

During the quarter, the book value of Clairvest and CEP V’s holding company, Head Digital Works, increased significantly following favorable court rulings in various jurisdictions in India and valuation indications resulting fundraising by industrial competitors of Head Digital Works. As of March 31, 2022, Clairvest’s investment in Head Digital Works represented 14% of Clairvest’s net assets. As previously indicated, this investment is subject to various regulatory developments which could result in significant positive or negative changes in the valuation of this investment.

Subsequent to year-end, Clairvest and CEP V entered into a definitive agreement to partially realize their interest in Meriplex Communications. The closing of this transaction is subject to various conditions, including regulatory approvals.

Also after the end of the year, Clairvest and holding company CEP VI NovaSource Power Services entered into a definitive agreement for a capital increase in which a third-party investor is to acquire a minority stake for US$100 million. The closing of this transaction is subject to various conditions, including regulatory approvals.

“Clairvest ended fiscal 2022 on a high note with the stellar exit of AlsoEnergy, which demonstrates our investment strategy focused on building industry insights and supporting owner-operators, both of which have contributed to this successful achievement. Following our first renewable energy exit, NovaSource, our second investment in this space has also signed a definitive agreement for a capital raise to support the company’s upcoming growth initiatives,” said Ken Rotman , CEO of Clairvest. Elsewhere in the portfolio, Meriplex has entered into a definitive agreement to partially sell the company (pending satisfaction of customary closing conditions) and would represent another tremendous outcome for Clairvest in the IT services space. On another note, we remain cautiously bullish on Head Digital Works based on recent regulatory wins and industry valuations seen.

Also after year-end, Clairvest declared an annual ordinary dividend of $0.10 per share and a special dividend of $0.6833 per share, so that in total the dividends represent 1% of the value as of March 31, 2022. Both dividends will be payable on July 28, 2022 to common shareholders of record as of July 6, 2022 and are eligible dividends for Canadian income tax purposes.

Summary of financial results – unaudited
Financial results(1) Quarter ended Year ended
March, 31st March, 31st
2022 2021 2022 2021
(in thousands of dollars, except per share amounts) $ $ $ $
Net investment gain (loss) 223,040 38,892 355,620 150,528
Net reach of Clairvest Equity Partners III and IV 5,831 (2,212) 5,977 (9,299)
Distributions, Interest Income, Dividends and Fees 24,841 8,160 59,460 36,494
Total expenditure (recovery), excluding income taxes 19,887 27,669 46,044 60,934
Net profit (loss) and comprehensive income (loss) 207,016 14,784 330 207 104,839
Basic and fully diluted net earnings (loss) per share 13.75 0.98 21.93 6.96
Financial situation March, 31st March, 31st
2022 2021
(in thousands of dollars, except share information and per share amounts) $ $
Total assets 1,353,143 985 025
Total cash, cash equivalents and temporary investments 348,795 279 373
Deferred interest from Clairvest Equity Partners III and IV 35,496 34,318
Corporate investments(1) 849,073 534,667
Total responsibilities 174,056 127 218
Participation in the management of Clairvest Equity Partners III and IV 26,997 25,996
Book value(2) 1,179,087 857 807
Common shares outstanding 15,052,301 15,058,401
Book value per share(2) 78.33 56.96

(1) Includes deferred interest of $201,852 (March 31: $88,343) and management participation of $141,328 (March 31: $60,346) from Clairvest Equity Partners V and VI, and $80,504 (March 31: $60,346) $65,953) in cash, cash equivalents and temporary investments held by the acquisition of Clairvest entities.
(2) Book value is a non-IFRS measure calculated as the value of total assets minus the value of total liabilities.

Clairvest’s annual financial statements and MD&A for fiscal 2022 are available on the SEDAR website at www.sedar.com and on Clairvest’s website at www.clairvest.com.

About Clairvest
Clairvest’s mission is to partner with entrepreneurs to help them build strategically important businesses. Founded in 1987 by a group of successful Canadian entrepreneurs, Clairvest is a top-performing private equity management firm with over C$3.2 billion in capital under management. Clairvest invests its own capital and that of third parties through the Clairvest Equity Partners limited partnerships in owner-managed businesses. Under the current management team, Clairvest has initiated investments in 57 different platform companies and has delivered top quartile performance over an extended period.

Contact information

Stephanie Lo
Manager, Investor Relations and Marketing
Clairvest Group Inc.
Tel: (416) 925-9270
Fax: (416) 925-5753
[email protected]

Forward-looking statements
This press release contains forward-looking statements about 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 that may cause the actual results, performance or achievements of Clairvest, its subsidiaries, its CEP limited partnerships and their investments are materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors include general business and economic conditions and regulatory risks. Clairvest undertakes no obligation to update any forward-looking statements contained herein if material facts should change as a result of new information, future events or otherwise.

www.clairvest.com

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