Diversified Royalty Corp. Announces Amendment to AIR MILES(TM) Licenses

Executive Summary

• Diversified Royalty Corp.’s subsidiary AM Royalties LP amended its Air Miles license agreements, securing a fixed annual royalty of $3.925 million (quarterly payments) guaranteed by BMO.
• The royalty will increase 2.42% per year starting Feb 1 2027 and is projected to total ~​$43.8 million over the next 10 years.
• AM LP gains the right to sell or license the Air Miles trademarks after Feb 1 2032, while Air Miles may buy out the remaining term for the net present value of future royalties.

Key Details

• Amendment Parties: AM Royalties Limited Partnership (AM LP), Air Miles Loyalty Inc., Bank of Montreal (BMO).
• Royalty Terms: Fixed annual payment of $3,925,000, paid quarterly; escalates 2.42% annually beginning Feb 1 2027.
• Guarantee: Payments are now guaranteed by BMO.
• Future Monetization Rights: AM LP may sell/license the Air Miles trademarks on or after Feb 1 2032.
• Buy‑out Option: Air Miles can purchase the remaining license term (excluding trademarks) on or after Feb 1 2032 for a cash amount equal to the net present value of the outstanding royalty stream.
• Financial Impact: First‑year royalty increases >20% versus 2025 level ($3.2 M). Projected total royalties over ten years ≈ $43.8 M, converting a historically low‑performing royalty into one of DIV’s strongest on a risk‑adjusted basis.
• CEO Comment: Sean Morrison highlighted the amendment as a “superior economic outcome” that stabilizes cash flow and enhances dividend‑supporting capacity.

Notable Quotes

“The Amendment is a superior economic outcome for DIV… The Amendment increases the annual royalty payment by over 20% and turns DIV’s weakest performing royalty into among its strongest, on a risk adjusted basis.” – Sean Morrison, CEO, Diversified Royalty Corp.