TIDMDUKE
RNS Number : 2040A
Duke Royalty Limited
28 May 2019
28 May 2019
Duke Royalty Limited
("Duke Royalty", "Duke" or the "Company")
GBP1.4 Million Follow-On Contribution with 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
announce a follow-on investment of GBP1.4 million into its royalty
partner Welltel (Ireland) Limited ("Welltel").
Highlights:
-- The investment represents the first follow-on investment that
Duke has made into the portfolio recently acquired via Capital
Step
-- Duke's total investment in Welltel amounts to approximately EUR6.9 million
-- A pro forma cash yield of approximately 16% on the total amount
-- Welltel is a telecommunications solutions provider for over
3,000 business customers and a multiple winner of Deloitte's
"Fast-50" award in Ireland
Royalty Partner - Welltel
Welltel, which was founded in 2007 and is headquartered in
Dublin, is a rapidly growing communications company currently
employing 70 people and providing managed services to over 3,000
business customers in Ireland and internationally.
Welltel became a Duke royalty partner as a result of its recent
acquisition of Capital Step, which initially invested in Welltel in
June 2017. Capital Step subsequently upsized its position in
Welltel in February 2018 to EUR5.3 million via a senior-secured
Uni-tranche product, consisting of a EUR3.55 million term loan and
a EUR1.75 million perpetual royalty.
In 2018, Welltel was a winner for the fifth consecutive year of
the Deloitte "Fast-50" award, which is an award given to the fifty
fastest growing technology companies in Ireland.
About the Financing
As a result of its latest contribution, Duke's new exposure to
Welltel amounts to approximately EUR6.9 million with a pro forma
cash yield of approximately 16%.
Use of proceeds for the GBP1.4 million include the settlement of
all outstanding deferred consideration in relation to Welltel's two
previous acquisitions and for general working capital purposes.
The investment secures Duke's first ranking position in the
capital structure and provides Welltel with a strong and liquid
balance sheet that will allow it to continue its path of strong
organic sales growth as well as allowing it to investigate new
accretive acquisition targets.
In that regard, as part of this new investment Duke has secured
the right to provide additional follow-on investment into Welltel
in the future as and when new acquisition targets are identified
and consummated. Both parties have signed a formal exclusivity
agreement which gives Duke the right, but not the obligation, to
provide additional senior secured funding to Welltel as part of the
overall funding solution for the next acquisition.
Neil Johnson, CEO of Duke Royalty, said:
"This investment represents the first follow-on investment that
Duke has made into the portfolio recently acquired via Capital
Step. Having spent time with CEO and co-founder Ross Murray and his
team over the past few months, we've been impressed with their
drive to continue expanding the business both organically and
through accretive acquisitions."
Ross Murray, CEO of Welltel, said:
"Duke's funding solution is an excellent fit, allowing companies
like ours to maintain control whilst benefiting from flexible and
long-term capital that provides us the platform to implement our
acquisition strategy without re-financing risk."
Duke Royalty Portfolio
Following this follow-on investment into Welltel, Duke's
portfolio of core royalty investments is as follows:
Royalty Partner Total Investment Amount Date of Initial Investment
Temarca B.V. EUR10,700,000 April 2017
------------------------ ---------------------------
Berkley Recruitment EUR1,300,000 June 2017
(Group) Limited
------------------------ ---------------------------
Welltel (Ireland) EUR6,900,000 June 2017
Limited
------------------------ ---------------------------
Lynx Equity (UK) GBP10,000,000 October 2017
Limited
------------------------ ---------------------------
Xtremepush Limited GBP2,000,000 February 2018
------------------------ ---------------------------
Trimite Global GBP10,000,000 March 2018
Coatings Limited
------------------------ ---------------------------
United Glass Group GBP7,500,000 April 2018
Ltd (formerly Brownhills
Investments Limited)
------------------------ ---------------------------
Pearl & Dean Cinemas GBP2,500,000 June 2018
Limited
------------------------ ---------------------------
BHPC Limited EUR4,600,000 August 2018
------------------------ ---------------------------
InterHealth Canada GBP10,000,000 August 2018
------------------------ ---------------------------
Brightwater Selection EUR1,875,000 September 2018
(Ireland) Limited
------------------------ ---------------------------
MRDB Holdings Limited GBP10,000,000 February 2019
Group
------------------------ ---------------------------
***ENDS***
About Duke
For further information, please contact www.dukeroyalty.com, or
contact:
Neil Johnson / Charlie
Duke Royalty Limited Cannon-Brookes +44 (0) 1481 741 240
Stephen Keys / Callum
Cenkos Securities Davidson (Nomad)
plc / Julian Morse /
(Nominated Adviser Michael Johnson
and Broker) (Brokers) +44 (0) 207 397 8900
------------------------ ------------------------------
Newgate Communications Elisabeth Cowell +44 (0) 20 3757 6880
(PR) / Ian Silvera / Dukeroyalty@newgatecomms.com
Tom Carnegie
------------------------ ------------------------------
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 Welltel
Welltel designs, commissions and maintains telecoms and
connectivity solutions to over 3,000 customers in Ireland and
internationally. Welltel works with leading manufacturers,
including Alcatel-Lucent Enterprise, Avaya, Cisco, Liquid Voice,
NEC, Polycom and Verint to ensure its customers benefit from the
latest, business-centric technology to help their business function
and grow effectively.
For more information, visit www.welltelgroup.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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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END
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