Duke Royalty Limited Follow-on investment into existing Royalty Partner (6082L)
14 January 2021 - 6:00PM
UK Regulatory
TIDMDUKE
RNS Number : 6082L
Duke Royalty Limited
14 January 2021
14 January 2021
Duke Royalty Limited
("Duke Royalty", "Duke" or the "Company")
Follow-on investment into 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
confirm that, further to the announcement made on 12 November 2020,
it has completed a follow-on investment of GBP2.2 million (the
"Follow-on" or "Transaction") into its existing royalty partner
Step Investments Limited ("Step"). Step is the holding company for
a range of interests in the private education, advertising and
hospitality sectors, including Pearl and Dean Cinemas Limited
("Pearl and Dean").
Highlights:
-- Duke's funds have been used by Step, in part, to acquire a
majority equity stake in the Dublin-based private education
subsidiary City Education Group ("CEG"), a long standing,
profitable business with a strong balance sheet which will provide
the foundation for Duke's future monthly royalty payments from
Step
-- Additionally, Duke's funds have been used in part to
facilitate a further acquisition by a Step subsidiary of a majority
interest in Adtower Digital Media ("Adtower"), a profitable Irish
business within the digital out of home advertising sector, which
has demonstrated resilience through the Covid-19 pandemic through
their focus on supermarkets, petrol stations and convenience
stores. This acquisition diversifies Step's revenues further and
increases its EBITDA
-- Now that this transaction has completed, Step will
immediately resume monthly royalty payments to Duke including all
catch up payments from 1 October 2020
-- As part of the follow-on investment, Duke's 30% equity stake
in Step, partially in lieu of foregone cash royalty payments over
the six month forbearance period from April 2020 to September 2020,
has been confirmed, which demonstrates Duke's ability to preserve
shareholder value while assisting our royalty partners
-- The investment further strengthens Duke's senior security
position and Duke will also take a board seat at Step
About CEG
Step's now majority-owned private education subsidiary, CEG,
owns and manages four different private educational facilities
throughout Dublin. CEG's oldest educational facility dates back to
the 1970's, and CEG's management team have had recent success in
acquiring schools. CEG is a profitable and growing group, that has
managed its business efficiently through Covid-19 and fits well
with Duke's investment criteria. CEG also presents an attractive
platform through which to pursue strategic M&A in the education
sector - particularly in light of the increasing shift towards
online education, where CEG has navigated this transition
successfully.
About Adtower
Since launching in 2011, Adtower has rapidly grown to be the
leading Irish digital out of home advertising provider. Step's
existing advertising subsidiary, Wide Eye Outdoor, has acquired a
majority equity stake in Adtower and this complementary acquisition
doubles the number of out-of-home advertising panels within Step's
network and adds additional diversification to the business.
Combined, Step now controls more than five times as many
advertising panels across the Republic of Ireland as its nearest
competitor. With Adtower's leading-edge technology delivery and
analytics systems "ADAM" it has become a significant player in the
market. Adtower's profitable operations will contribute to the
EBITDA of the advertising subsidiary, and near-term synergies exist
through the combination with Wide Eye Outdoor.
Neil Johnson, Duke CEO said:
"Our long-term capital is recognised by our partners as being an
ideal solution for facilitating acquisition strategies and we are
pleased to support Step as it diversifies, following a challenging
period. Step has the same criteria for acquisitions as Duke, being
historical, predictable profitability with demonstrable synergies.
The acquisitions it is undertaking with Duke's capital will seek
non-correlated profitability and will build the base of stability
for the future. In particular, CEG has a range of synergistic
acquisition opportunities in the short to medium term.
"Our forbearance has given Step the breathing room it needed to
recover and serves as another example of Duke's commitment to its
royalty partners over the long-term, even during times of
adversity. We are confident in the Group's long-term prospects and
look forward to the next chapter."
***ENDS***
For further information, please visit www.dukeroyalty.com or
contact:
Neil Johnson / Charlie
Cannon Brookes /
Duke Royalty Limited Hugo Evans +44 (0) 1481 741 240
Cenkos Securities plc Stephen Keys / Callum
(Nominated Adviser Davidson / Julian
and Joint Broker) Morse / Michael Johnson +44 (0) 207 397 8900
Canaccord Genuity Adam James / Georgina
(Joint Broker) McCooke +44 (0) 207 523 8000
Newgate Communications Elisabeth Cowell/ + +44 (0) 20 3757 6880
(PR) Ian Silvera/ Megan dukeroyalty@newgatecomms.com
Kovach
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.
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