Follow-on contribution to royalty partner

RNS Number : 8959R

Duke Royalty Limited

01 November 2019

 

1 November 2019

 Duke Royalty Limited

("Duke Royalty", "Duke" or the "Company")

£2 Million Follow-On Contribution with Existing Royalty Partner

Duke Royalty Limited (AIM: DUKE), a provider of alternative capital solutions to a diversified range of profitable and long-established businesses in Europe and abroad, is pleased to announce a follow-on investment of £2 million into its existing royalty partner Lynx Equity (UK) Ltd. ("Lynx UK").

Lynx UK will allocate Duke's further contribution towards the acquisition of Danish manufacturer, Sundby Trapper ("Sundby"), which was undertaken in May 2019 and represents its fifth acquisition across the UK and Europe. This follow-on investment diversifies both Duke's portfolio and Lynx UK's revenue base.

Based on the increased investment and enhanced exposure of £12 million in Lynx UK, Duke will be entitled to higher distributions of £1.6 million per annum from Lynx UK, beginning in November 2019. This represents a pro forma cash yield of 13.0% on total invested capital. This follow-on transaction will also increase the security of Duke's investment. All other terms of the £2 million contribution are the same as Duke's previous investment made into Lynx UK.

Sundby is a manufacturer of specialised steel staircases and related products in Denmark and throughout the Nordic region. Founded in 1964, it has a strong market presence and a solid growth opportunity servicing residential, commercial and institutional markets. Its reputation for best-in-class products has enabled it to win bids for prestigious projects, including The National Gallery of Denmark and the Norwegian Royal Palace.

Neil Johnson, CEO of Duke Royalty, said:

"We are delighted to deliver further portfolio diversification and income through the rapid deployment of proceeds raised from our recent fundraise. Lynx UK has a strong track record of financial performance which has facilitated two consecutive positive annual adjustments and, when consolidating its five wholly owned businesses, represents one of our largest Royalty Partners by revenue and EBITDA.

"This contribution further highlights our track-record of being a flexible and long-term funding partner for businesses in the UK, Europe and abroad."

Duke Royalty Portfolio

Following this follow-on investment into Lynx, Duke's portfolio of core royalty investments is as follows:

Royalty Partner	Total Investment Amount	Date of Initial Investment
Temarca B.V.	€10,700,000	April 2017
Berkley Recruitment (Group) Limited	€1,300,000	June 2017
Welltel (Ireland) Limited	€6,900,000	June 2017
Lynx Equity (UK) Limited	£12,000,000	October 2017
Xtremepush Limited	£2,000,000	February 2018
Trimite Global Coatings Limited	£10,000,000	March 2018
United Glass Group Ltd (formerly Brownhills)	£7,500,000	April 2018
Step Investments Limited	£2,750,000	June 2018
BHPC Limited	€4,600,000	August 2018
InterHealth Canada	£10,000,000	August 2018
Brightwater Selection (Ireland) Limited	€1,875,000	September 2018
MRDB Holdings Limited Group	£10,000,000	February 2019

**ENDS**

For further information, please contact www.dukeroyalty.com, or contact:

Duke Royalty Limited	Neil Johnson / Charlie Cannon-Brookes	[phone]
Cenkos Securities plc (Nominated Adviser and Broker)	Stephen Keys / Callum Davidson (Nomad) Julian Morse / Michael Johnson (Brokers)	[phone]
Newgate Communications (PR)	Elisabeth Cowell / Ian Silvera / Megan Kovach	[phone] [e-mail]

About Duke Royalty

Duke Royalty Limited provides alternative capital solutions to a diversified range of profitable and long-established businesses in Europe and abroad. Duke Royalty's experienced team provide financing solutions to private companies that are in need of capital but whose owners wish to maintain equity control of their business. Duke Royalty's royalty investments are intended to provide robust, stable, long term returns to its shareholders. Duke Royalty is listed on the AIM market under the ticker DUKE and is headquartered in Guernsey.

Royalty Partner - Lynx UK

Duke entered into a royalty agreement with Lynx UK, a wholly-owned subsidiary of Lynx Equity Limited ("Lynx (Canada)"), on October 5, 2017 to finance Lynx UK's acquisition strategy as its "preferred European capital provider" up to a total investment pool of £15m in tranches on a drawdown basis with proceeds being used to acquire target companies in Europe.

Lynx UK's European portfolio currently includes Denmark's PartnerService and Sundby Trapper, and UK's Signalhome, Label Express and Day2 Interiors.

Lynx (Canada) is a Toronto-based private company founded over 10 years ago with a portfolio of more than 50 operating companies and revenue exceeding C$450 million, that seeks to acquire, own, and operate mature, old-economy businesses, with no intent of sale.

Lynx Equity's unique business model and continued portfolio growth has resulted in the company being ranked 45th among Canada's Fastest Growing Companies. Lynx Equity's portfolio businesses operate in a diverse range of industries, and typically produce between $750,000 to $2,500,000 of EBITDA.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

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