REG - Duke Capital - New Capital Partner - Integrum Care

Duke CapitalAnnouncement

02/04/2024 07:00

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RNS Number : 9028I  Duke Capital Limited  02 April 2024

02 April 2024

 

Duke Capital Limited

 

("Duke Capital", "Duke" or the "Company")

 

New Capital Partner - Integrum Care

Duke Capital Limited (AIM: DUKE), a leading provider of hybrid capital
solutions for SME business owners in Europe and North America, is pleased to
announce that it has entered into a £14.5 million financing agreement (the
"Financing") with a newly formed entity, to acquire Integrum Care - Clearbrook
Limited trading as Integrum Care Group ("Integrum"), further diversifying
Duke's revenue base. Integrum operates six elderly nursing care homes in Kent
and East Sussex.

Highlights:

 

·        Duke's initial £14.5 million financing will be used to
acquire Integrum, as well as replace a rent deposit with the owner of
Integrum's leasehold properties

·        Integrum has completed six acquisitions of elderly care homes
across the Kent and East Sussex regions of England within the past six years.
Four of the sites were sold and subsequently leased back in 2022, whilst two
freehold properties have been retained

·        Duke intends to support Integrum's ongoing buy-and-build
strategy, recognising Integrum's strength as a platform and its impressive
management team with a strong track record in the elderly care sector

·        Integrum's care homes are well maintained, with strong
occupancy levels and good Care Quality Commission ratings. These care homes
have a diversified funding mix between private healthcare payors, the NHS and
Local Authorities

·        The Financing has been agreed on typical Duke terms: 30-year
secured financing, monthly cash payments starting in typical range,
distributions commencing immediately and to be adjusted annually based on
Integrum's consolidated revenue growth

·        Duke will also become a 49% equity shareholder in Integrum,
building strong alignment with our new capital partner

 

Neil Johnson, CEO of Duke Capital, said:

"Duke is excited to invest in Integrum and looks forward to contributing to
its ongoing success in the future. For us, it represents the ideal platform to
support within this sub-sector, primarily because it is overseen by an
exceptional team led by Adrian Pancott, who brings a wealth of experience to
the table.

"Integrum has demonstrated a strong track record of buying and integrating
quality elderly nursing care homes run by best-in-class home managers and we
look forward to supporting the group as it embarks on its next phase of
growth."

Adrian Pancott, CEO of Integrum, said:

 

"Duke's unique capital offering is a great fit for Integrum at this time as we
look to continue to invest in and improve the homes we already own, whilst
looking to further M&A. Duke's existing Social Care sector expertise and
the importance they place on quality of care makes them the perfect partner
for us, and we are delighted about the opportunity to work together going
forward. The whole Duke team operates with the highest levels of integrity and
have inspired everyone at Integrum from the first day we met them."

 

Further information regarding Integrum

 

Integrum Care Group was formed in September 2018 and currently represents a
family of six elderly care homes across the South East of England, employing
over 475 people and catering for over 300 service users. The group focuses on
nursing care within the elderly care industry, providing full residential care
typically for residents with higher acuity needs.

 

The homes are a mix of purpose-built and converted properties with
long-standing operations, with some homes having supported their local
communities for more than 50 years.

 

Adrian Pancott is Integrum's CEO and brings a wealth of experience in the
elderly care sector, with 20 years of operational experience in leading some
of the largest care businesses across specialist and elderly care throughout
the UK. Adrian was previously COO of Barchester, where he was responsible for
all operational elements of the £2.5bn business with annual turnover of
£600m and 17,000 employees. Before this, Adrian spent three years working for
the Priory Group as the CEO of their elderly care division.

 

About the Financing

 

Duke has committed an initial £14.5 million of capital, while also agreeing
in principle to potentially increase its investment in Integrum with future
tranches of capital. With regard to further care home acquisitions, Integrum's
stated acquisition criteria align closely with Duke's own.

 

The terms of the Financing are in line with Duke's typical investment
criteria. The Financing is provided through a combination of a secured loan
and preference shares and Duke will be entitled to monthly distributions (the
"Distribution") beginning in April 2024.

 

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 total combined gross revenues of the Group
for the most recently completed financial year (year end December), compared
to the prior financial (calendar) year. The first adjustment will occur in
April 2025. The annual adjustment in the Distribution will be subject to a -/+
6% collar.

 

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

Duke Capital Portfolio

A full list of Duke's current Partners is included for reference on the
Partners page of the Company's website: www.dukecapital.com/partners
(http://www.dukecapital.com/partners) .

 

 

***ENDS***

 

For further information, please visit www.dukecapital.com
(http://www.dukecapital.com) or contact:

 

 Duke Capital Limited                                                    Neil Johnson / Charles Cannon Brookes / Hugo Evans  +44 (0) 1481 231 816

 Cavendish Capital Markets Limited (Nominated Adviser and Joint Broker)  Stephen Keys / Callum Davidson / Michael Johnson    +44 (0) 207 220 0500

 Canaccord Genuity Limited                                               Adam James / Harry Rees                             +44 (0) 207 523 8000

 (Joint Broker)

 SEC Newgate (Financial Communications)                                  Elisabeth Cowell / Alice Cho / Matthew Elliott      + +44 (0) 20 3757 6882 dukecapital@secnewgate.co.uk

 

 

About Duke Capital

 

Duke is a leading provider of hybrid capital solutions for SME business owners
in Europe and North America, combining the best features of both equity and
debt.

 

Since 2017, Duke has provided unique long-term financing which eliminates
re-financing risk and necessity for a short-term exit by providing a unique
'corporate mortgage' while also aligning its returns to grow with the success
of the business.

 

Duke is focused on generating attractive risk-adjusted returns for
shareholders and has a track record of achieving this across market cycles.
Its three investment pillars are capital preservation, attractive dividend
yield, and to provide upside upon exits. Duke is listed on the AIM market
under the ticker DUKE and is headquartered in Guernsey.

 

 

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