Duke Capital Regulatory News (DUKE)

02 April 2024

Duke Capital Limited

("Duke Capital", "Duke" or the "Company")

New Capital Partner - Integrum Care

Duke Capital Limited (AIM: DUKE), a leading provider of hybrid capital solutions for SME business owners in Europe and North America, is pleased to announce that it has entered into a £14.5 million financing agreement (the "Financing") with a newly formed entity, to acquire Integrum Care - Clearbrook Limited trading as Integrum Care Group ("Integrum"), further diversifying Duke's revenue base. Integrum operates six elderly nursing care homes in Kent and East Sussex.

Highlights:

· Duke's initial £14.5 million financing will be used to acquire Integrum, as well as replace a rent deposit with the owner of Integrum's leasehold properties

· Integrum has completed six acquisitions of elderly care homes across the Kent and East Sussex regions of England within the past six years. Four of the sites were sold and subsequently leased back in 2022, whilst two freehold properties have been retained

· Duke intends to support Integrum's ongoing buy-and-build strategy, recognising Integrum's strength as a platform and its impressive management team with a strong track record in the elderly care sector

· Integrum's care homes are well maintained, with strong occupancy levels and good Care Quality Commission ratings. These care homes have a diversified funding mix between private healthcare payors, the NHS and Local Authorities

· The Financing has been agreed on typical Duke terms: 30-year secured financing, monthly cash payments starting in typical range, distributions commencing immediately and to be adjusted annually based on Integrum's consolidated revenue growth

· Duke will also become a 49% equity shareholder in Integrum, building strong alignment with our new capital partner

Neil Johnson, CEO of Duke Capital, said:

"Duke is excited to invest in Integrum and looks forward to contributing to its ongoing success in the future. For us, it represents the ideal platform to support within this sub-sector, primarily because it is overseen by an exceptional team led by Adrian Pancott, who brings a wealth of experience to the table.

"Integrum has demonstrated a strong track record of buying and integrating quality elderly nursing care homes run by best-in-class home managers and we look forward to supporting the group as it embarks on its next phase of growth."

Adrian Pancott, CEO of Integrum, said:

"Duke's unique capital offering is a great fit for Integrum at this time as we look to continue to invest in and improve the homes we already own, whilst looking to further M&A. Duke's existing Social Care sector expertise and the importance they place on quality of care makes them the perfect partner for us, and we are delighted about the opportunity to work together going forward. The whole Duke team operates with the highest levels of integrity and have inspired everyone at Integrum from the first day we met them."

Further information regarding Integrum

Integrum Care Group was formed in September 2018 and currently represents a family of six elderly care homes across the South East of England, employing over 475 people and catering for over 300 service users. The group focuses on nursing care within the elderly care industry, providing full residential care typically for residents with higher acuity needs.

The homes are a mix of purpose-built and converted properties with long-standing operations, with some homes having supported their local communities for more than 50 years.

Adrian Pancott is Integrum's CEO and brings a wealth of experience in the elderly care sector, with 20 years of operational experience in leading some of the largest care businesses across specialist and elderly care throughout the UK. Adrian was previously COO of Barchester, where he was responsible for all operational elements of the £2.5bn business with annual turnover of £600m and 17,000 employees. Before this, Adrian spent three years working for the Priory Group as the CEO of their elderly care division.

About the Financing

Duke has committed an initial £14.5 million of capital, while also agreeing in principle to potentially increase its investment in Integrum with future tranches of capital. With regard to further care home acquisitions, Integrum's stated acquisition criteria align closely with Duke's own.

The terms of the Financing are in line with Duke's typical investment criteria. The Financing is provided through a combination of a secured loan and preference shares and Duke will be entitled to monthly distributions (the "Distribution") beginning in April 2024.

In line with Duke's other investments, and reflective of the participating nature of Duke's business model, the Distribution will be adjusted annually based on the percentage change in total combined gross revenues of the Group for the most recently completed financial year (year end December), compared to the prior financial (calendar) year. The first adjustment will occur in April 2025. The annual adjustment in the Distribution will be subject to a -/+ 6% collar.

The Financing is for a period of 30 years, with the Distribution payable to Duke throughout the duration of this term, unless Integrum utilises an early buyback option which will trigger an early buyout payment to Duke.

Duke Capital Portfolio

A full list of Duke's current Partners is included for reference on the Partners page of the Company's website: www.dukecapital.com/partners.

***ENDS***

For further information, please visit www.dukecapital.com or contact:

About Duke Capital

Duke is a leading provider of hybrid capital solutions for SME business owners in Europe and North America, combining the best features of both equity and debt.

Since 2017, Duke has provided unique long-term financing which eliminates re-financing risk and necessity for a short-term exit by providing a unique 'corporate mortgage' while also aligning its returns to grow with the success of the business.

Duke is focused on generating attractive risk-adjusted returns for shareholders and has a track record of achieving this across market cycles. Its three investment pillars are capital preservation, attractive dividend yield, and to provide upside upon exits. Duke is listed on the AIM market under the ticker DUKE and is headquartered in Guernsey.