Duke Capital Regulatory News (DUKE)

16 December 2021

Duke Royalty Limited

("Duke Royalty" or "Duke")

New Royalty Agreement with Specialist Social Care Business

Duke Royalty, a provider of alternative capital solutions to a diversified range of profitable and long-established businesses in Europe and North America, is pleased to announce that it has entered into a new £10.5 million royalty financing agreement (the "Financing") with Tristone Healthcare Limited ("Tristone"), further broadening its revenue base.

Tristone provides specialist residential and domiciliary care in two end markets: i) high acuity adults with severe mental, physical or learning disabilities; and ii) care leavers, aged 16-19, who are transitioning out of social care and into independent living.

Highlights:

· Initial cash yield of 13.5% per annum via monthly payments, which commence immediately.

· 30-year secured financing, with distributions to be adjusted annually to reflect Tristone's consolidated revenue growth, on typical Duke terms.

· Tristone's subsidiaries have a combined 40 year operating history, and offer a high degree of recurring revenue, with demonstrated organic growth.

· Formed in 2015, Tristone has acquired three specialist care businesses to date, and Duke expects to provide further financing over the next 18 months to fund Tristone's growing pipeline of bolt-on transactions.

· Duke's initial investment will refinance Tristone's existing capital structure.

Neil Johnson, CEO of Duke Royalty, said:

"Duke Royalty is excited to be entering the UK care space. There is a growing need for high-quality operators in Tristone's end markets and the company has a strong reputation for delivering outstanding support. Our long-term funding helps Tristone grow capacity while removing refinancing risk, so the business can focus on allocating capital towards what matters - best-in-class care for vulnerable people.

"We are excited to back its CEO, Yannis, and the Tristone team as a royalty partner because they have a long-term vision, they exemplify social responsibility, and because partnering with Duke aligns with their goals."

Yannis Loucopoulos, CEO of Tristone, said:

"We were looking for a funding partner that shares our values and vision for building a group of care businesses with a long term, care-centric focus which prioritises delivering outstanding care and support.

"The long-term and non-controlling characteristics of this financing was compelling as it enables us to focus on what we do best without any refinancing risk and without having to compromise our values or approach. We look forward to working with the team to deliver our shared ambitions."

About Tristone

Tristone is committed to the acquisition and growth of social care companies which have proven business models. Tristone deeply understands the demands of social care and support and has extensive experience of investing in and building businesses of this nature, having supported a number of different care businesses since formation in 2015.

Tristone's management philosophy is to operate a simple and care-centric community of businesses that focus, first and foremost, on delivering outstanding care and support. Tristone's operating subsidiaries retain their identity and value base, and Tristone aims to help support existing management and staff teams to unlock further growth and value and ultimately positively impact more lives.

About the Financing

Duke has agreed to provide Tristone with a total investment line of up to £20 million. The remaining £9.5 million will primarily be drawn in the future for the acquisition of additional care homes and for general working capital purposes.

The terms of the Financing are broadly 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 December 2021.

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 Tristone's total gross revenues for the 12 months to 31 March 2022, compared to the prior financial year. The first adjustment will occur from 30 June 2022. The annual adjustment in the Distribution will be subject to an agreed collar, in line with Duke's typical terms.

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

Duke will also receive a 17.5% equity stake in the business as part of the transaction.

Duke Royalty Portfolio

A full list of Duke's current Royalty Partners are now included for reference on the Partners page of the Company's website: www.dukeroyalty.com/partners

This announcement contains inside information.

***ENDS***

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

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.