Duke Royalty signs finance deal with RV parts provider Miriad

(Sharecast News) - Alternative capital provider Duke Royalty has provided £10m royalty financing to the MRDB Holdings group, which undertakes business as Miriad Products, it announced on TuesdayThe AIM-traded firm said Miriad, founded in 1977, was the largest privately-owned recreational vehicle (RV) parts wholesale company in the UK.It said the transaction represented Duke's 12th royalty partner, further diversifying Duke's revenue base.Initial cash-on-cash yield would be more than 13%. per annum via monthly payments, which would be immediately payable following the closing of the investment.The secured financing, which would be for 30 years, would see distributions adjusted annually to reflect Miriad's consolidated revenue growth.Duke said Miriad had "very low" customer concentration risk and a "long history" of turnover growth and profitability, providing more than 15,000 parts from a variety of suppliers, many of which were on a UK-exclusive basis.It was also led by four owner-managers, who had successfully grown sales since their management buyout from £0.9m in 1999 to £23m in 2018.Alongside Duke's financing, two new directors were being appointed, who would provide strategic and mergers and acquisitions advice to Miriad, as well as also becoming shareholders.Duke said its financing structure also provided the shareholder group with the flexibility to incentivise other members of the wider management team in due course .The firm said it still retained sufficient liquidity via its existing cash holdings and debt facility to make additional royalty investments."Miriad is a very well-managed business and a market leader in its sector, making it an ideal royalty partner for Duke," said Duke Royalty chief executive officer Neil Johnson."The business' long history of growing profitability and its ability to withstand, and in fact grow during previous economic downturns, makes us excited about the Company's future."Johnson said as the company's 12th core holding, the deal built on the diversification Duke had recently achieved through the acquisition of Capital Step."Importantly, Duke's existing cash holdings and acquired debt facility mean that we are well positioned to make more investments in the coming months."Duke's pipeline remains strong and I look forward to updating shareholders on new investments in due course."