(Sharecast News) - Duke Royalty announced the successful exit of its £2m investment in its royalty partner, the Dublin-based business-too-business technology platform Xtremepush, on Monday.
The AIM-traded firm said the transaction represented its first exit, and reported that after exit fees, the investment's internal rate of return was over 22%, with a cash-on-cash return in excess of 1.5x.
Duke said it had retained its warrant over 3% of Xtremepush's share capital, representing further potential upside in the future.
Xtremepush had been a royalty partner since February 2018, and operated in an online sector that had attracted "substantial" amounts of capital, growing "robustly" in recent years through a combination of organic growth and mergers and acquisitions.
Duke's capital had played an important role in that, the board said, having been used to fund the strategic acquisitions of Emailcenter UK in March 2018 and Alchemetrics in December 2019.
Whilst Xtremepush represented one of the smaller investments within the Duke portfolio, the board said the deal had still returned an "attractive" internal rate of return, which was expected to be further enhanced following the eventual exercise of its warrants over 3% of Xtremepush's share capital.
"We have enjoyed working with the Xtremepush team as they have grown the business from strength to strength," said chief executive officer Neil Johnson.
"We are proud of the role Duke's flexible capital solution has played in Xtremepush's recent success and wish Tommy and the team all the best as they continue to drive the business forward.
"We are equally pleased to have successfully generated returns in excess of 22% for Duke's shareholders, further validating the attractiveness of our model."
At 1038 BST, shares in Duke Royalty were up 2.59% at 26.93p.
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