/NOT FOR DISTRIBUTION TO U.S.
NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
VANCOUVER,
Feb. 18, 2020
/CNW/ - 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 investment dealers led by Cormark
Securities Inc. (collectively, the "Underwriters") pursuant to
which the Underwriters have agreed to purchase 9,400,000 Common
Shares (the "Common Shares") from the treasury of the Corporation,
at a price of $3.20 per Common Share
(the "Offering Price") for total gross proceeds of approximately
$30 million (the
"Offering").
In addition, the Corporation has
granted the Underwriters an option (the "Over-Allotment Option") to
purchase up to an additional 1,410,000 Common Shares from the
treasury of the Corporation at the Offering Price for additional
gross proceeds of up to approximately $4.5
million for market stabilization purposes and to cover
over-allotments, if any. The Over-Allotment Option is exercisable,
in whole or in part, by the Underwriters at any time up to 30 days
following the closing of the Offering.
The net proceeds of the Offering will be used for
repayment of outstanding amounts under DIV's acquisition line
following the completion of DIV's royalty transaction with Oxford
Learning Centres, Inc., working capital and general corporate
purposes, which may include the acquisition of additional royalties
from DIV's existing royalty partners.
Closing of the Offering is expected to occur on or about
March 5, 2020 and is subject to
customary conditions, including the receipt of all necessary
regulatory approvals including that of the Toronto Stock Exchange
(the "TSX").
The Common Shares to be issued under the Offering
(including the Over-Allotment Option) will be offered by way of a
short form prospectus to be filed in each of the Provinces of
Canada, except Quebec.
This news release shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any sale
of the securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
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 United States Securities Act of 1933, as
amended, and such securities may not be offered or sold within
the United States absent
registration under U.S. federal and state securities laws or
compliance with an applicable exemption from such U.S. registration
requirements.
About Diversified Royalty Corp.
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®, Sutton, Mr. Mikes
and Nurse Next Door trademarks. Mr. Lube is the
leading quick lube service business in Canada with 185
locations across Canada
and over $235 million of annual
system sales. AIR MILES® is Canada's largest coalition loyalty program
with over 200 leading brand-name sponsors; approximately two-thirds
of Canadian households actively participate in the AIR
MILES® Program. Sutton
is among the leading residential real estate brokerage franchisor
businesses in Canada with over 200
offices across Canada.
Mr. Mikes operates 45 casual
steakhouse restaurants primarily in western Canadian communities
with over $85 million of annual
system sales. Nurse Next Door is one of North America's fastest growing home care
providers and operates over 180 locations across Canada, the United
States and Australia with
over $100 million of annual system
sales.
DIV expects 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.
Forward Looking 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 expected closing date for the Offering; the
completion of DIV's royalty transaction with Oxford Learning
Centres, Inc.; the approval of the TSX; 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. 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 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
11, 2019, and the
"Risk Factors" section of its management's discussion and analysis
for the three and nine months ended September 30, 2019 that 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 complete its royalty
transaction with Oxford Learning Centres, Inc., and
the business and economic conditions affecting DIV and its
royalty partners 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.
THE TORONTO
STOCK EXCHANGE HAS NOT REVIEWED
AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY
OF THIS RELEASE.
Additional Information
Additional information relating to the Corporation and
other public filings, is available on SEDAR at
www.sedar.com.
SOURCE Diversified Royalty Corp.
