Last checked at 14 Jan 2021 07:00
14 January 2021
Duke Royalty Limited
("Duke Royalty", "Duke" or the "Company")
Follow-on investment into 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 confirm that, further to the announcement made on 12 November 2020, it has completed a follow-on investment of £2.2 million (the "Follow-on" or "Transaction") into its existing royalty partner Step Investments Limited ("Step"). Step is the holding company for a range of interests in the private education, advertising and hospitality sectors, including Pearl and Dean Cinemas Limited ("Pearl and Dean").
Highlights:
· Duke's funds have been used by Step, in part, to acquire a majority equity stake in the Dublin-based private education subsidiary City Education Group ("CEG"), a long standing, profitable business with a strong balance sheet which will provide the foundation for Duke's future monthly royalty payments from Step
· Additionally, Duke's funds have been used in part to facilitate a further acquisition by a Step subsidiary of a majority interest in Adtower Digital Media ("Adtower"), a profitable Irish business within the digital out of home advertising sector, which has demonstrated resilience through the Covid-19 pandemic through their focus on supermarkets, petrol stations and convenience stores. This acquisition diversifies Step's revenues further and increases its EBITDA
· Now that this transaction has completed, Step will immediately resume monthly royalty payments to Duke including all catch up payments from 1 October 2020
· As part of the follow-on investment, Duke's 30% equity stake in Step, partially in lieu of foregone cash royalty payments over the six month forbearance period from April 2020 to September 2020, has been confirmed, which demonstrates Duke's ability to preserve shareholder value while assisting our royalty partners
· The investment further strengthens Duke's senior security position and Duke will also take a board seat at Step
About CEG
Step's now majority-owned private education subsidiary, CEG, owns and manages four different private educational facilities throughout Dublin. CEG's oldest educational facility dates back to the 1970's, and CEG's management team have had recent success in acquiring schools. CEG is a profitable and growing group, that has managed its business efficiently through Covid-19 and fits well with Duke's investment criteria. CEG also presents an attractive platform through which to pursue strategic M&A in the education sector - particularly in light of the increasing shift towards online education, where CEG has navigated this transition successfully.
About Adtower
Since launching in 2011, Adtower has rapidly grown to be the leading Irish digital out of home advertising provider. Step's existing advertising subsidiary, Wide Eye Outdoor, has acquired a majority equity stake in Adtower and this complementary acquisition doubles the number of out-of-home advertising panels within Step's network and adds additional diversification to the business. Combined, Step now controls more than five times as many advertising panels across the Republic of Ireland as its nearest competitor. With Adtower's leading-edge technology delivery and analytics systems "ADAM" it has become a significant player in the market. Adtower's profitable operations will contribute to the EBITDA of the advertising subsidiary, and near-term synergies exist through the combination with Wide Eye Outdoor.
Neil Johnson, Duke CEO said:
"Our long-term capital is recognised by our partners as being an ideal solution for facilitating acquisition strategies and we are pleased to support Step as it diversifies, following a challenging period. Step has the same criteria for acquisitions as Duke, being historical, predictable profitability with demonstrable synergies. The acquisitions it is undertaking with Duke's capital will seek non-correlated profitability and will build the base of stability for the future. In particular, CEG has a range of synergistic acquisition opportunities in the short to medium term.
"Our forbearance has given Step the breathing room it needed to recover and serves as another example of Duke's commitment to its royalty partners over the long-term, even during times of adversity. We are confident in the Group's long-term prospects and look forward to the next chapter."
***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.