Last checked at 22 Dec 2020 07:00
Duke Royalty Limited
("Duke Royalty", "Duke" or the "Company")
Duke Royalty Limited Successful Exit of Investment in 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 the successful exit of its investment in royalty partner Welltel (Ireland) Limited ("Welltel"), the Dublin-based telecoms, IT and network specialist.
Highlights:
· Duke received net cash of £15.4 million at closing, after exit fees, delivering an IRR on the Welltel investment of 27%
· Welltel represented the largest investment in Duke's portfolio with a last-audited fair value of £13.2 million
· Following its initial investment in June 2017, Duke made five subsequent follow-on investments, four of which were to fund M&A transactions
· Due to the minimally dilutive features of Duke's offering, Welltel's shareholders have retained majority ownership and control throughout Duke's period of investment, allowing significant value creation for their shareholders
· The transaction represents Duke Royalty's second exit after the recent realisation of Xtremepush in September 2020, further validating the Duke funding model
· Proceeds from this exit will leave Duke in a positive net cash position, thereby providing significant liquidity of over £30 million for new deployments with several new and follow-on investment opportunities currently at a late stage of due diligence
Neil Johnson, CEO of Duke Royalty, said:
"Duke's flexible, long term capital has been key to facilitating Welltel's ambitious strategy during the past three years, and we're proud to have supported them during a period of significant growth. Our role in financing five separate M&A transactions since 2017 demonstrates the close working relationship that we have with John Quinn, Ross Murray and the Welltel team and we wish them all the best. Exits are very much part of the Duke business model and this transaction exemplifies how Welltel were able to control the timing of when they took on a private equity partner and maximize their equity value.
"Duke Royalty received proceeds which were £2 million in excess of the Company's last-audited fair value, confirming the unrealised value inherent in the royalty agreements' redemption premiums. The proceeds have put Duke in a very strong financial position and I look forward to being able to announce investments into new and existing royalty partners in the short term."
John Quinn, Chairman of Welltel, added:
"We would like to thank Duke Royalty for its financial support during a period of rapid expansion in Welltel's business. Duke's rapid turnaround time was instrumental in enabling Welltel to execute several M&A transactions in a short period of time and to allow us to make the most of attractive M&A opportunities in the Irish telecoms market.
"Duke's long dated capital allowed us to grow by acquisition without the fear and distraction of having to refinance our loans at a time of high growth and value creation in our business. We very much enjoyed the partnership with Duke and wish them well in the future."
***ENDS***
For further information, please visit www.dukeroyalty.com or contact:
Duke Royalty Limited | Neil Johnson / Charlie Cannon Brookes / Hugo Evans
| +44 (0) 1481 741 240 |
Cenkos Securities plc (Nominated Adviser and Joint Broker)
| Stephen Keys / Callum Davidson / Julian Morse / Michael Johnson
| +44 (0) 207 397 8900
|
Canaccord Genuity (Joint Broker)
| Adam James / Georgina McCooke
| +44 (0) 207 523 8000 |
Newgate Communications (PR) | Elisabeth Cowell/ Ian Silvera/ Megan Kovach | + +44 (0) 20 3757 6880 dukeroyalty@newgatecomms.com
|
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.
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon publication of this announcement, this inside information is now considered to be in the public domain.