PRE-EMPTIVE VALUE

• Developed a clear understanding of the current and future value of Clarion and its business units and studied a wide range of strategic alternatives.
• Explored the sale of one of Clarion’s low-growth businesses.
• Clarion was approached by Richards Packaging Income Fund (“Richards”) during this process.
• Valitas negotiated a pre-emptive valuation and a deal structure that compared favourably to Clarion's other alternatives on a risk-adjusted basis.

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HIGH VALUE DURING A PANDEMIC?

• ‍‍Richards acquired Clarion for $64.4 million (plus earn-outs) on June 1, 2020.
• The COVID-19 pandemic impacted Clarion’s aesthetic operations during the late stages of negotiations, which threatened to derail the transaction.
• Valitas worked collaboratively with Richards’ financial advisor and the legal teams from both sides to implement a risk-sharing structure to address concerns with COVID-impacted performance post-closing.

THE OUTCOME

Clarion’s shareholders realized a double-digit EBITDA multiple on closing, with an uncapped earn-out that would increase value by an additional $40 million if the plan is achieved.