CVG Clairvest Group Inc

Clairvest Group Inc. (TSX: CVG) today reported results for the fiscal 2025 first quarter ended June 30, 2024 and events which occurred subsequent to quarter end. (All figures are in Canadian dollars unless otherwise stated)

Highlights

• June 30, 2024 book value was $1,186.2 million or $81.02 per share compared with $1,176.3 million or $80.16 per share as at March 31, 2024
• Net income for the quarter ended June 30, 2024 was $23.9 million or $1.63 per share
• Clairvest and Clairvest Equity Partners VI (“CEP VI”) made two platform investments during the quarter to complete the CEP VI Fund investment program and Clairvest commenced the CEP VII investment program
• Clairvest and Clairvest Equity Partners V (“CEP V”) completed the sale of Durante Rentals
• Subsequent to quarter end, Clairvest, CEP V and CEP VI completed the sale of FSB Technology
• Subsequent to quarter end, Clairvest and CEP V completed the sale of Winters Bros. Waste Systems of Long Island
• Subsequent to quarter end, Clairvest paid $0.8016 in dividends

Clairvest’s book value was $1,186.2 million or $81.02 per share as at June 30, 2024, compared with $1,176.3 million or $80.16 per share as at March 31, 2024. For the quarter ended June 30, 2024, Clairvest recorded net income of $23.9 million, or $1.63 per share, which was primarily driven by a net increase in the valuation of Clairvest’s private equity investment portfolio. Also during the quarter, Clairvest purchased and cancelled 32,050 common shares at an average price of $70.92/share, or a total cost of $2.3 million, which added $0.03 per share to the book value.

As described in the Clairvest fiscal 2024 fourth quarter and year end press release, Clairvest and CEP VI completed two platform investments during the quarter, completing the CEP VI Fund investment program with a total of fourteen investments. With the completion of the CEP VI investment program, Clairvest commenced the CEP VII investment program which has total committed capital of US$1.2 billion, US$902 million of which is third party capital.

During the quarter, Clairvest and CEP V sold their interest in Durante Rentals at a loss, with proceeds equating to 0.7x what was invested, which was at a small premium to the carrying value at March 31, 2024. Clairvest received US$8 million of sale proceeds.

In July 2024, Clairvest exited FSB Technology and did not receive any proceeds. FSB Technology was previously written off entirely in 2023.

Also in July 2024, Clairvest, CEP V and the Winters family sold Winters Bros. Waste Systems of Long Island (“Winters Bros. Long Island”) to Waste Management. Proceeds on the sale generated a 6.8x return on invested capital, or US$57 million for Clairvest. As at June 30, 2024, Clairvest’s investment in Winters Bros. Long Island was carried at the exit value. In addition, we anticipate additional proceeds could be generated on the sale of other assets not acquired by Waste Management which could raise the multiple of money realized to over 7x.

“The successful Winters Bros. result is a testament to the business that the Winters Family has built over the past nine years where they grew it into an industry leader on Long Island. We are proud to have been their partner in 3 different waste management investments and hope we can partner with them again,” said Ken Rotman, CEO of Clairvest. “At the same time, we pride ourselves on honestly assessing each situation and taking appropriate action, even when unpleasant. Cleaning up the portfolio enables us to focus on our core mission of building assets of strategic significance, which is critical to our ongoing success. While we still have more issues to address, putting the Durante and FSB Technology investments behind us is a step in the right direction. These realized losses, the first in some time, represent catalysts to reassess our process and internalize some lessons learned. Our track record includes 45 exits which generated an aggregate return of 3.8x invested capital; it includes many terrific wins but also 9 losses, of which these are two.”

Also subsequent to quarter end, Clairvest paid an annual ordinary dividend of $0.10 per share and a special dividend of $0.7016 per share, such that in aggregate, the dividends represent 1% of the March 31, 2024 book value. Both dividends were paid on July 26, 2024 to common shareholders of record as at July 5, 2024 and are eligible dividends for Canadian income tax purposes.

Summary of Financial Results – Unaudited
Financial Results(1)	Quarter ended
	June 30
	2024	2023
($000’s, except per share amounts)	$	$
Net investment gain	20,112	24,469
Net carried interest from Clairvest Equity Partners III and IV	2,124	591
Distributions, interest income, dividends and fees	16,703	11,809
Total expenses, excluding income taxes	11,958	15,831
Net income and comprehensive income	23,921	19,462
Basic and fully diluted net income per share	1.63	1.30

Financial Position	June 30	March 31,
	2024	2024
($000’s, except share information and per share amounts)	$	$
Total assets	1,361,010	1,342,139
Total cash, cash equivalents, temporary investments and restricted cash	282,572	330,193
Carried interest from Clairvest Equity Partners III and IV	54,312	52,188
Corporate investments(1)	929,377	870,660
Total liabilities	174,802	165,842
Management participation from Clairvest Equity Partners III and IV	43,105	41,506
Book value(2)	1,186,208	1,176,297
Common shares outstanding	14,641,651	14,673,701
Book value per share(2)	81.02	80.16

(1) Includes carried interest of $151,846 (March 31: $143,617) and management participation of $109,761 (March 31: $103,740) from Clairvest Equity Partners V and VI, and $105,360 (March 31: $90,973) in cash, cash equivalents and temporary investments held by Clairvest’s acquisition entities.(2) Book value is a Non-IFRS measure calculated as the value of total assets less the value of total liabilities.

Clairvest’s first quarter fiscal 2025 financial statements and MD&A are available on the SEDAR website at www.sedar.com and the Clairvest website at www.clairvest.com.

About Clairvest Clairvest’s mission is to partner with entrepreneurs to help them build strategically significant businesses. Founded in 1987 by a group of successful Canadian entrepreneurs, Clairvest is a top performing private equity management firm with over CAD $4.6 billion of capital under management. Clairvest invests its own capital and that of third parties through the Clairvest Equity Partners limited partnerships in owner-led businesses. Under the current management team, Clairvest has initiated investments in 66 different platform companies and generated top quartile performance over an extended period.

Contact InformationStephanie LoDirector, Investor Relations and MarketingClairvest Group Inc.Tel: (416) 925-9270Fax: (416) 925-5753stephaniel@clairvest.com

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.

www.clairvest.com