TIDMDUKE
RNS Number : 1841Z
Duke Royalty Limited
30 August 2018
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 GBP10 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 GBP10 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 GBP10 million initial investment amount, the Year 1
annual distribution is expected to total approximately GBP1.35
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 Date of Royalty
Amount Agreement
Temarca B.V Euro 9,000,000 April 2017
------------------- ----------------
Lynx Equity (UK) Limited GBP 9,000,000 October 2017
------------------- ----------------
Trimite Global Coatings GBP 9,000,000 March 2018
Limited
------------------- ----------------
Brownhills Investments GBP 6,500,000 April 2018
Limited
------------------- ----------------
InterHealth Canada Holding GBP 10,000,000 August 2018
Corp
------------------- ----------------
***ENDS***
For further information, please contact www.dukeroyalty.com, or
contact:
+44 (0) 1481 741
Duke Royalty Limited Neil Johnson/ Charlie Cannon-Brookes 240
Grant Thornton UK
LLP Colin Aaronson/ Samantha +44 (0) 20 7383
(Nominated Adviser) Harrison 5100
Cenkos Securities
plc +44 (0) 207 397
(Joint Broker) Julian Morse/ Michael Johnson 8900
Mirabaud Securities
Limited +44 (0) 20 3167
(Joint Broker) Peter Krens/ Edward Haig-Thomas 7222
Redleaf Communications Elisabeth Cowell/ Robin +44 (0) 20 3757
(PR) Tozer/ Ian Silvera 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.
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END
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