Last checked at 30 Aug 2018 07:00
30 August 2018
Duke Royalty Limited
("Duke Royalty", "Duke" or the "Company")
New Royalty Agreement with a Canadian Healthcare Organisation
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 that it has entered into a £10 million royalty financing agreement (the "Financing") with InterHealth Canada Holding Corp ("ICHC").
ICHC is the wholly owned subsidiary of a 24-year-old Canadian-based organisation InterHealth Canada Limited ("InterHealth Canada") that specialises in the development, commissioning and management of healthcare facilities in various countries around the world.
Highlights
· This is the largest partner that Duke has funded to date
· As Duke's fifth Royalty Partner, this transaction broadens Duke's revenue base and increases portfolio diversification, thereby reducing risk for investors
· Further validates royalty finance as a preferable source of finance for well established, profitable businesses in Europe and abroad
· This is the first deal to be completed in healthcare services, one of Duke's preferred and target sectors due to the reliable and recurring nature of revenues
· Initial cash-on-cash yield of more than 13 per cent. per annum via monthly payments immediately payable post closing of the investment
· 30 year secured financing - distributions to be adjusted annually to reflect InterHealth Canada's consolidated revenue growth
Neil Johnson, CEO of Duke Royalty, said:
"I am delighted to announce this transaction with ICHC. With its exciting future growth plans and its long-term profitable operating history, ICHC represents an ideal long-term partner for Duke. Importantly, ICHC is the largest company with which Duke has transacted to date and, given that it represents our first investment in the healthcare services sector, we are pleased to have further diversified and de-risked the existing Duke portfolio."
New Royalty Partner
ICHC is a leading healthcare organization specialising in the development, commissioning and management of healthcare facilities and services using a public-private partnership model. Its core business is to export Canada's Healthcare intellectual and management expertise to other countries.
Established in 1994, InterHealth Canada has employed over 5,000 professionals worldwide and has provided healthcare to a combined population of over 20 million people. InterHealth Canada is committed to delivering internationally accredited healthcare management services with an emphasis on investment returns. The head office is located in Toronto, Canada, with regional offices in Riyadh, London, Providenciales, Grand Turks, Warsaw and Dubai.
About the Financing
Duke has committed to provide ICHC with £10 million upon closing, with the ability to increase this investment by a further US$5 million on the agreement of both parties within a period of 150 days post closing.
The terms of the Financing are in line with Duke's typical investment criteria. The Financing is provided through a secured loan and Duke will be entitled to monthly distributions (the "Distribution") beginning in September 2018. On an annual basis, based on the £10 million initial investment amount, the Year 1 annual distribution is expected to total approximately £1.35 million, equating to an initial cash-on-cash yield of over 13 per cent.
In line with Duke's other investments and reflective of the participating nature of the Duke investment, the Distribution will be adjusted annually based on the percentage change in total combined gross revenues for the 12 months to 31 December 2019 compared with the prior financial year. The annual adjustment in the Distribution will be subject to an agreed collar.
The Financing is for a period of 30 years, with the Distribution payable to Duke throughout the duration of this term, unless ICHC utilises an early buyback option (no buyback option available for the first four years).
Duke Royalty Portfolio
Following the completion of the ICHC Financing, the Company's portfolio of royalty investments is as follows with approximately GBP 42.5 million of capital deployed to date:
Royalty Partner | Royalty Investment Amount | Date of Royalty Agreement |
Temarca B.V | Euro 9,000,000 | April 2017 |
Lynx Equity (UK) Limited | GBP 9,000,000 | October 2017 |
Trimite Global Coatings Limited | GBP 9,000,000 | March 2018 |
Brownhills Investments Limited | GBP 6,500,000 | April 2018 |
InterHealth Canada Holding Corp | GBP 10,000,000 | August 2018 |
***ENDS***
For further information, please contact www.dukeroyalty.com, or contact:
Duke Royalty Limited | Neil Johnson/ Charlie Cannon-Brookes
| +44 (0) 1481 741 240 |
Grant Thornton UK LLP (Nominated Adviser) | Colin Aaronson/ Samantha Harrison
| +44 (0) 20 7383 5100
|
Cenkos Securities plc (Joint Broker)
| Julian Morse/ Michael Johnson | +44 (0) 207 397 8900 |
Mirabaud Securities Limited (Joint Broker)
| Peter Krens/ Edward Haig-Thomas
| +44 (0) 20 3167 7222 |
Redleaf Communications (PR)
| Elisabeth Cowell/ Robin Tozer/ Ian Silvera | +44 (0) 20 3757 6880 Dukeroyalty@redleafpr.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.
About InterHealth Canada
InterHealth Canada is a leading healthcare organization specializing in the development, commissioning and management of healthcare facilities. Our core business is to export Canada's Healthcare intellectual and management expertise to emerging economies. InterHealth Canada is committed to delivering internationally accredited healthcare management services with an emphasis on investment returns.
Our head office is located in Toronto, Canada with regional offices in Riyadh, London, Providenciales, Grand Turks, Warsaw and Dubai. We are committed to providing world's best practice, the latest knowledge and expertise through lifelong learning and delivering continuous professional development to our multidiscipline team. Since 1994, InterHealth has employed over 5000 professionals worldwide and has provided healthcare to a combined population of over 20 million people.
For further information, please see the websites for the group: www.interhealthcanada.com
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.