03:45:04 EDT Fri 29 Mar 2024
Enter Symbol
or Name
USA
CA



Diversified Royalty Corp
Symbol DIV
Shares Issued 122,661,339
Close 2022-03-21 C$ 3.11
Market Cap C$ 381,476,764
Recent Sedar Documents

ORIGINAL: Diversified Royalty Corp. Announces $52.5 Million Bought Deal Offering Of 6.00% Convertible Unsecured Subordinated Debentures

2022-03-21 15:27 ET - News Release

/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

VANCOUVER, British Columbia, March 21, 2022 (GLOBE NEWSWIRE) -- Diversified Royalty Corp. (TSX: DIV and DIV.DB) (the "Corporation" or "DIV") is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by CIBC Capital Markets, National Bank Financial Inc. and Scotiabank (the "Underwriters") pursuant to which the Underwriters have agreed to purchase $52,500,000 aggregate principal amount of 6.00% convertible unsecured subordinated debentures (the "Debentures") at a price of $1,000 per Debenture (the "Offering").

In addition, the Corporation has granted the Underwriters an option ("Over-Allotment Option") to purchase up to an additional $7,875,000 aggregate principal amount of Debentures at the offering price exercisable at any time up to 30 days following closing.

The Debentures will mature June 30, 2027 and will bear interest at an annual rate of 6.00% payable semi-annually in arrears on the last day of June and December in each year, commencing June 30, 2022. At the holder's option, the Debentures may be converted into common shares of the Corporation ("Common Shares") at any time prior to the close of business on the earlier of the last business day immediately preceding June 30, 2027 and the date fixed for redemption. The conversion price will be $4.05 per Common Share (the "Conversion Price"), subject to adjustment in certain circumstances.

The Debentures will not be redeemable on or before June 30, 2025. After June 30, 2025 and prior to June 30, 2026, the Debentures may be redeemed in whole or in part from time to time at DIV's option, provided that the volume weighted average trading price of the Common Shares on the Toronto Stock Exchange (the "TSX") during the 20 consecutive trading days ending on the fifth trading day preceding the date on which the notice of the redemption is given is not less than 125% of the Conversion Price. On or after June 30, 2026 and prior to the maturity date, DIV may, at its option, redeem the Debentures, in whole or in part, from time to time at par plus accrued and unpaid interest.

DIV intends to redeem (the "Redemption") all of its outstanding convertible unsecured subordinated debentures due December 31, 2022 (the "2022 Debentures") prior to December 31, 2022. The net proceeds of the Offering, together with other funds, are expected to be used towards the Redemption of the 2022 Debentures.

Closing of the Offering is expected to occur on or about March 30, 2022 and is subject to regulatory approval including that of the TSX.

The Debentures to be issued under the Offering will be offered by way of a prospectus supplement to the Corporation's short form base shelf prospectus dated May 11, 2021 in each of the provinces of Canada, except Quebec, and may be offered in the United States on a private placement basis pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and certain other jurisdictions.

This news release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the U.S. Securities Act, and such securities may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.

AboutDiversified RoyaltyCorp.

DIV is a multi-royalty corporation, engaged in the business of acquiring top-line royalties from well-managed multi-location businesses and franchisors in North America. DIV's objective is to acquire predictable, growing royalty streams from a diverse group of multi-location businesses and franchisors.

DIV currently owns the Mr. Lube, AIR MILES(TM), Sutton, Mr. Mikes, Nurse Next Door and Oxford Learning Centres trademarks. Mr. Lube is the leading quick lube service business in Canada, with locations across Canada. AIR MILES(TM) is Canada's largest coalition loyalty program with approximately two-thirds of Canadian households actively participating in the AIR MILES(TM) Program. Sutton is among the leading residential real estate brokerage franchisor businesses in Canada. Mr. Mikes currently operates casual steakhouse restaurants primarily in western Canadian communities. Nurse Next Door is one of North America's fastest growing home care providers with locations across Canada and the United States as well as in Australia. Oxford Learning Centres is one of Canada's leading franchised supplemental education services in Canada and the United States.

DIV intends to increase cash flow per share by making accretive royalty purchases and through the growth of purchased royalties. DIV expects to pay a predictable and stable dividend to shareholders and increase the dividend as cash flow per share increases allow.

ForwardLooking Statements

Certain statements contained in this news release may constitute "forward-looking information" within the meaning of applicable securities laws that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. The use of any of the words "anticipate", "continue", "estimate", "expect", "intend", "may", "will", "project", "should", "believe", "confident", "plan" and "intends" and similar expressions are intended to identify forward-looking information, although not all forward-looking information contains these identifying words. Specifically, forward-looking information in this news release includes, but is not limited to, statements made in relation to: the intended use of proceeds from the Offering; the ability of the Corporation to source the funds needed to fully redeem the 2022 Debentures; the closing of the Offering or the Over-Allotment Option, including the expected closing date for the Offering; the approval of the TSX; the expected terms of the Debentures; the intended redemption of DIV's outstanding convertible unsecured subordinated debentures and the timing thereof; DIV's ability to pay a predictable and stable dividend to shareholders; and DIV's corporate objectives. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events, performance, or achievements of DIV to differ materially from those anticipated or implied by such forward-looking information, including, without limitation, the ongoing conflict between Russia and Ukraine and any actions taken by other countries in response thereto, such as sanctions or export controls. DIV believes that the expectations reflected in the forward-looking information included in this news release are reasonable but no assurance can be given that these expectations will prove to be correct. In particular there can be no assurance that: the Offering will close in accordance with the expected timing, or at all; the actual use of proceeds will be consistent with current expectations; the Corporation will be able to source the funds needed to fully redeem the 2022 Debentures; the TSX will approve the Offering; DIV will be able to make monthly dividend payments to the holders of its common shares; or DIV will achieve any of its corporate objectives. Given these uncertainties, readers are cautioned that forward-looking information included in this news release are not guarantees of future performance, and such forward-looking information should not be unduly relied upon. More information about the risks and uncertainties affecting DIV's business and the businesses of its royalty partners can be found in the "Risk Factors" section of its Annual Information Form dated March 10, 2022 and in its most recent Management's Discussion and Analysis, copies of each of which are available under DIV's profile on SEDAR at www.sedar.com.

In formulating the forward-looking information contained herein, management has assumed that all necessary approvals for the Offering will be obtained and that the Offering will be completed successfully, DIV will generate sufficient cash flows from its royalties to service its debt and pay dividends to shareholders; DIV will be able to source the funds needed to fully redeem the 2022 Debentures using cash on hand or, if necessary, obtaining additional funds through new credit facilities or by amending its existing credit facilities; the impacts of COVID-19 on DIV and its royalty partners will be consistent with DIV's expectations and the expectations of management of each of its Royalty Partners, both in extent and duration; DIV and its royalty partners will be able to reasonably manage the impacts of the COVID-19 outbreak on their respective businesses and will continue substantially in the ordinary course, including without limitation with respect to general industry conditions, general levels of economic activity and regulations. These assumptions, although considered reasonable by management at the time of preparation, may prove to be incorrect.

All of the forward-looking statements made in this news release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, DIV. The forward-looking information included in this news release is presented as of the date of this news release and DIV assumes no obligation to publicly update or revise such information to reflect new events or circumstances, except as may be required by applicable law.

THETORONTOSTOCKEXCHANGEHASNOTREVIEWEDANDDOESNOTACCEPTRESPONSIBILITYFORTHEADEQUACYORTHEACCURACYOFTHISRELEASE.

AdditionalInformation

Additional information relating to the Corporation and other public filings, is available on SEDAR at www.sedar.com.

Contact:
Sean Morrison, President and Chief Executive Officer
Diversified Royalty Corp.
(236) 521-8470

Greg Gutmanis, Chief Financial Officer and VP Acquisitions
Diversified Royalty Corp.
(236) 521-8471



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