Follow-on contribution to royalty partner
1 November 2019
Duke Royalty Limited
("Duke Royalty", "Duke" or the "Company")
£2 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 £2 million into its existing royalty partner Lynx Equity (UK) Ltd. ("Lynx UK").
Lynx UK will allocate Duke's further contribution towards the acquisition of Danish manufacturer, Sundby Trapper ("Sundby"), which was undertaken in May 2019 and represents its fifth acquisition across the UK and Europe. This follow-on investment diversifies both Duke's portfolio and Lynx UK's revenue base.
Based on the increased investment and enhanced exposure of £12 million in Lynx UK, Duke will be entitled to higher distributions of £1.6 million per annum from Lynx UK, beginning in November 2019. This represents a pro forma cash yield of 13.0% on total invested capital. This follow-on transaction will also increase the security of Duke's investment. All other terms of the £2 million contribution are the same as Duke's previous investment made into Lynx UK.
Sundby is a manufacturer of specialised steel staircases and related products in Denmark and throughout the Nordic region. Founded in 1964, it has a strong market presence and a solid growth opportunity servicing residential, commercial and institutional markets. Its reputation for best-in-class products has enabled it to win bids for prestigious projects, including The National Gallery of Denmark and the Norwegian Royal Palace.
Neil Johnson, CEO of Duke Royalty, said:
"We are delighted to deliver further portfolio diversification and income through the rapid deployment of proceeds raised from our recent fundraise. Lynx UK has a strong track record of financial performance which has facilitated two consecutive positive annual adjustments and, when consolidating its five wholly owned businesses, represents one of our largest Royalty Partners by revenue and EBITDA.
"This contribution further highlights our track-record of being a flexible and long-term funding partner for businesses in the UK, Europe and abroad."
Duke Royalty Portfolio
Following this follow-on investment into Lynx, Duke's portfolio of core royalty investments is as follows:
Total Investment Amount
Date of Initial Investment
Berkley Recruitment (Group) Limited
Welltel (Ireland) Limited
Lynx Equity (UK) Limited
Trimite Global Coatings Limited
United Glass Group Ltd (formerly Brownhills)
Step Investments Limited
Brightwater Selection (Ireland) Limited
MRDB Holdings Limited Group
For further information, please contact www.dukeroyalty.com, or contact:
Duke Royalty Limited
Neil Johnson / Charlie Cannon-Brookes
+44 (0) 1481 741 240
Cenkos Securities plc
(Nominated Adviser and Broker)
Stephen Keys / Callum Davidson (Nomad)
Julian Morse / Michael Johnson (Brokers)
+44 (0) 207 397 8900
Elisabeth Cowell / Ian Silvera / Megan Kovach
+44 (0) 20 3757 6880
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.
Royalty Partner - Lynx UK
Duke entered into a royalty agreement with Lynx UK, a wholly-owned subsidiary of Lynx Equity Limited ("Lynx (Canada)"), on October 5, 2017 to finance Lynx UK's acquisition strategy as its "preferred European capital provider" up to a total investment pool of £15m in tranches on a drawdown basis with proceeds being used to acquire target companies in Europe.
Lynx UK's European portfolio currently includes Denmark's PartnerService and Sundby Trapper, and UK's Signalhome, Label Express and Day2 Interiors.
Lynx (Canada) is a Toronto-based private company founded over 10 years ago with a portfolio of more than 50 operating companies and revenue exceeding C$450 million, that seeks to acquire, own, and operate mature, old-economy businesses, with no intent of sale.
Lynx Equity's unique business model and continued portfolio growth has resulted in the company being ranked 45th among Canada's Fastest Growing Companies. Lynx Equity's portfolio businesses operate in a diverse range of industries, and typically produce between $750,000 to $2,500,000 of EBITDA.
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