New royalty agreement with Birmingham-based Specialist Coatings manufacturer
Duke Royalty Limited, a provider of alternative capital solutions to a diversified range of profitable and long-established businesses in Europe and abroad, has announced that it has entered into a £9 million royalty financing agreement with Trimite Global Coatings Limited, a Birmingham-based specialist coatings manufacturer established in the 1940s.
In addition, the Company has announced that it has entered into non-binding terms with a fourth Royalty Partner and is also pleased to publish an updated unaudited balance sheet to better reflect its current financial position following its £20 million equity financing completed in December 2017.
Duke has committed £9.0 million to Trimite, its third royalty financing agreement in Europe, providing it with the necessary funds to buy-out a minority shareholder, to fund a small bolt-on acquisition and to provide the additional working capital required to fund its anticipated future organic sales growth. The initial cash-on-cash yield of over 13%. via monthly payments and 30 years of secured financing including distributions to be adjusted annually to reflect Trimite revenue growth.
2.5% equity interest in Trimite granted at no additional consideration. Trimite is a profitable supplier of industrial coatings to global brands and organisations with 120 employees across four UK plants and a highly experienced management team.
The Financing meets Duke's strategy to replicate the proven North American royalty model to create long-term value for shareholders in the form of predictable, robust dividend streams. Non-binding terms signed with a fourth Royalty Partner, a long established and profitable UK-based glass processing business.
Neil Johnson, CEO of Duke Royalty, said: "We have been working closely with Trimite for some time to execute this Financing. With a solid sales pipeline and a high-quality management team who are also investing their capital in the business, we feel that Trimite represents a textbook deal for Duke.
"In addition, we are pleased with the progress we are experiencing in terms of our future pipeline of deal opportunities and are confident that royalty financing will become increasingly understood as a highly competitive form of growth capital across our preferred sectors."
David Roberts, Chairman and majority shareholder of Trimite, said: "Trimite investigated a number of different financing alternatives and decided upon the Duke proposal as a result of the long-term, participating nature of the investment, which removes any short-term refinancing risk. Trimite looks forward to a long and positive partnership with Duke as we grow our business."