REG - Duke Royalty Limited - Follow-on contribution to royalty partner

Duke CapitalAnnouncement

28/05/2019 07:06

RNS Number : 2040A
Duke Royalty Limited
28 May 2019
 


28 May 2019
 
Duke Royalty Limited
("Duke Royalty", "Duke" or the "Company")
 
£1.4 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 £1.4 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 €6.9 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 €5.3 million via a senior-secured Uni-tranche product, consisting of a €3.55 million term loan and a €1.75 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 €6.9 million with a pro forma cash yield of approximately 16%. 
Use of proceeds for the £1.4 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.


€10,700,000    


April 2017




Berkley Recruitment (Group) Limited


€1,300,000    


June 2017




Welltel (Ireland) Limited


€6,900,000    


June 2017




Lynx Equity (UK) Limited


£10,000,000    


October 2017




Xtremepush Limited               


£2,000,000     


February 2018




Trimite Global Coatings Limited


£10,000,000     


March 2018




United Glass Group Ltd (formerly Brownhills Investments Limited)   


£7,500,000     


April 2018




Pearl & Dean Cinemas Limited


£2,500,000     


June 2018




BHPC Limited                     


€4,600,000    


August 2018




InterHealth Canada               


£10,000,000    


August 2018




Brightwater Selection (Ireland) Limited


€1,875,000    


September 2018




MRDB Holdings Limited Group


£10,000,000    


February 2019



 
 
 
***ENDS***
 
About Duke
 
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




Newgate Communications
(PR)


Elisabeth Cowell / Ian Silvera / Tom Carnegie


+44 (0) 20 3757 6880
Dukeroyalty@newgatecomms.com



 
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 Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
MSCCKQDNFBKDFPB