Diversified Royalty Corp. Announces $50 Million Bought Deal Public Offering of 5.75% Convertible Unsecured Subordinated Debentures

Executive Summary

• Diversified Royalty Corp. entered into a definitive agreement with CIBC Capital Markets and other underwriters to sell $50 million of 5.75% convertible unsecured subordinated debentures (the “Debentures”).
• An over‑allotment option allows the underwriters to purchase up to an additional $7.5 million of Debentures within 30 days after closing.
• Net proceeds will be used to repay a portion of the company’s acquisition facility, fund royalty pool additions for partners, and support working capital/general corporate purposes, thereby increasing future acquisition capacity.

Key Details

• Offering Size: $50,000,000 aggregate principal amount; price $1,000 per Debenture.
• Over‑Allotment Option: Up to $7,500,000 additional principal, exercisable within 30 days post‑closing.
• Interest Rate: 5.75% per annum, payable semi‑annually on the last day of March and September, starting 30 Sep 2026.
• Maturity: 31 Mar 2031; not redeemable before 31 Mar 2029.
• Conversion Terms: Convertible at any time prior to the earlier of (i) the last business day preceding 31 Mar 2031, or (ii) the redemption date, at a conversion price of $5.35 per Common Share (subject to adjustment).
• Redemption Rights:
• After 31 Mar 2029 and before 31 Mar 2030 – redeemable at DIV’s option if TSX VWAP over prior 20‑day period ≥ 125% of the conversion price.
• On/after 31 Mar 2030 and before maturity – redeemable at par plus accrued interest at DIV’s option.
• Use of Proceeds:
  1. Repay outstanding amounts under the corporation’s acquisition facility (increasing available borrowing capacity for future acquisitions).
  2. Fund expected additions to royalty pools of certain royalty partners.
  3. Working capital and general corporate purposes.
• Closing Expectation: On or about 9 Feb 2026, subject to regulatory approvals including TSX.
• Offering Documents: Prospectus Supplement filed with Canadian securities commissions (except Quebec) and accessible on SEDAR+ within two business days.

Notable Quotes

• Sean Morrison, Chief Executive Officer: “The net proceeds of this offering will strengthen our balance sheet, expand our royalty acquisition capacity, and support the growth of our existing royalty streams.”