REG - Duke Royalty Limited - Enters into Largest Royalty Agreement To Date

Duke CapitalAnnouncement

07/12/2021 07:00

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RNS Number : 7491U  Duke Royalty Limited  07 December 2021

7 December 2021

 

Duke Royalty Limited

 

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

 

Enters into Largest Royalty Agreement To Date

 

Duke Royalty (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 US$21.0 million
(approximately £15.9 million) royalty financing agreement (the "Financing")
with Atlas Signs Holdings, Inc. ("Atlas"). This partnership represents Duke's
largest investment to date and expands upon the Company's North American
presence.

 

Atlas is a US-based, turnkey national brand implementation company that
delivers signage, sign maintenance, lighting, installation, and project
management services to the world's leading companies.

 

Highlights:

 

·    Initial cash yield of 12.5% per annum via monthly payments, which
commence immediately

·    30-year secured financing, with distributions to be adjusted
annually to reflect Atlas' consolidated revenue growth, on typical Duke terms

·    Founded in 1992, Atlas is a family owned company with a long history
of successful operations, providing a complete range of signage-related
products and services

·    Atlas has a diverse and long-standing customer base including
national and Fortune 500 companies

·   Duke's financing will support the refinancing of Atlas' current debt,
general working capital and growth initiatives

 

Neil Johnson, CEO of Duke Royalty, said:

 

"This partnership is the largest investment in our history and further
diversifies our revenue base. We believe Atlas is a good example of a company
that is seeking long-term capital to replace conventional private credit. We
believe the pandemic has opened the opportunity for Duke to appeal to a
broader number and larger companies. As an owner-operator business with proven
profitability and growth, a history of successful operations with major
national brands and a strong customer service reputation, Atlas represents the
ideal royalty partner for Duke and we are delighted to support it with our
long-term financing."

 

Jim Adinolfe, CEO and Founder of Atlas, said:

 

"The long-term nature and flexibility of Duke's investment solution is a great
fit for Atlas, as it removes the need for periodic refinancings and provides
us with a secure platform for continued growth. We are excited about our
long-term partnership with Duke which allows the management team to focus on
getting back to business and executing on our business plan."

 

About Atlas Signs Holdings, Inc.

 

Established in 1992 in South Florida, United States as a local installer,
Atlas is now a top 10 national signage provider. With international coverage
and 12 offices throughout the country, Atlas employs over 200 people. The
Company has operated as a family-owned business since its inception. Today,
Atlas has three manufacturing facilities located across the Southern US and
can design, produce and install any type of signage need that its customers
may request.

 

Atlas is a provider of brand implementation products and services for Fortune
500 companies across multiple industries. Its wide range of sign and branding
offerings includes custom signage, architectural elements, digital signage,
custom graphics and digital prints. Atlas program management services include
design and engineering, in-house permitting, fabrication, self-performing
installation, custom reporting, high-rise capabilities along with
post-installation service and maintenance. Managing and executing on
large-scale rebranding programs and conversions are among its operating
strengths.

 

About the Financing

 

Duke has provided Atlas with an investment of US$21.0 million to be used
primarily for the refinancing of existing debt and for general working capital
purposes.

 

The terms of the Financing are broadly 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 December
2021.

 

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 Atlas' total gross revenues for the 12
months to 31 December 2022, compared to the prior financial (calendar) year.
The first adjustment will occur from 1 January 2023. The annual adjustment in
the Distribution will be subject to an agreed collar, in line with Duke's
typical terms.

 

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

 

Miami-based Vaupen Financial Advisors, LLC served as the financial advisors
for Atlas Signs Holdings on this financing transaction.

 

Duke Royalty Portfolio

 

A full list of Duke's current Royalty Partners are now included for reference
on the Partners page of our website: www.dukeroyalty.com/partners
(http://www.dukeroyalty.com/partners)

 

This announcement contains inside information.

 

***ENDS***

 

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

 

 Duke Royalty Limited     Neil Johnson / Charlie Cannon Brookes / Hugo Evans               +44 (0) 1481 730 613

 Cenkos Securities plc    Stephen Keys / Callum Davidson / Julian Morse / Michael Johnson  +44 (0) 207 397 8900

 (Nominated Adviser

 and Joint Broker)

 Canaccord Genuity        Adam James / Georgina McCooke                                    +44 (0) 207 523 8000

 (Joint Broker)

 SEC Newgate (PR)         Elisabeth Cowell / Richard Bicknell / Megan Kovach                +44 (0) 20 3757 6880 dukeroyalty@secnewgate.co.uk
                                                                                           (mailto:dukeroyalty@secnewgate.co.uk)

 

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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