(Sharecast News) - Alternative capital provider Duke Royalty announced a follow-on investment of £2m into its existing royalty partner Lynx Equity UK on Friday.
The AIM-traded company said Lynx UK would allocate Duke's further contribution towards the acquisition of Danish manufacturer, Sundby Trapper, which was undertaken in May and represented its fifth acquisition across the UK and Europe.
It said the follow-on investment diversified both Duke's portfolio and Lynx UK's revenue base.
Based on the increased investment and enhanced exposure of £12m in Lynx UK, Duke would be entitled to higher distributions of £1.6m per annum from Lynx UK, beginning in November.
That represented a pro forma cash yield of 13.0% on total invested capital.
Duke said the follow-on transaction would also increase the security of Duke's investment, with all other terms of the £2m contribution being 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, the board explained.
It said the company, founded in 1964, had a strong market presence and a solid growth opportunity servicing residential, commercial and institutional markets.
Sundby's reputation for best-in-class products had enabled it to win bids for prestigious projects, including the National Gallery of Denmark and the Norwegian Royal Palace.
"We are delighted to deliver further portfolio diversification and income through the rapid deployment of proceeds raised from our recent fundraise," said Duke Royalty chief executive officer Neil Johnson.
"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."
As at 1449 GMT, shares in Duke Royalty were down 0.34% at 43.65p.
Duke Capital (DUKE)5 Apr 2024 13:52