Diversified Royalty Corp. Announces Closing of $60 Million Bought Deal Offering of 5.75% Convertible Unsecured Subordinated Debentures

Executive Summary

• Diversified Royalty Corp. closed a $60 million bought‑deal public offering of 5.75% convertible unsecured subordinated debentures priced at $1,000 each.
• Net proceeds will be used to repay the corporation’s acquisition facility debt, fund additions to royalty pools, and for working capital/general corporate purposes, thereby increasing future acquisition capacity.
• The debentures mature on March 31 2031, bear semi‑annual interest, are convertible at $5.35 per common share, and include an over‑allotment option for up to an additional $9 million.

Key Details

• Offering Size & Price: $60 M aggregate principal amount of debentures; offering price $1,000 per debenture.
• Underwriters: Syndicate co‑led by CIBC Capital Markets (sole bookrunner) and Desjardins Securities Inc., with participation from Canaccord Genuity Corp., National Bank Financial Inc., Scotia Capital Inc., ATB Capital Markets Corp., BMO Nesbitt Burns Inc., iA Private Wealth Inc., and Raymond James Ltd.
• Over‑Allotment Option: Underwriters may purchase up to an additional $9 M of debentures at the same price, exercisable within 30 days after closing for over‑allotments or market stabilization.
• Use of Proceeds:
• Repay outstanding amounts under DIV’s acquisition facility.
• Fund expected additions to royalty pools of certain royalty partners.
• Working capital and general corporate purposes.
• Debt Terms:
• Interest rate: 5.75% per annum, payable semi‑annually in arrears on the last day of March and September (first payment ≈ $36.74 per $1,000 principal).
• Maturity: March 31 2031; not redeemable before March 31 2029.
• Redemption rights after March 31 2029 subject to TSX price conditions (≥125% of conversion price) and at par plus accrued interest after March 31 2030.
• Conversion Feature: Convertible at any time prior to the earlier of the last business day before March 31 2031 or the redemption date, at a conversion price of $5.35 per common share (subject to adjustment).
• Trading Symbol: The debentures began trading on the Toronto Stock Exchange under “DIV.DB.B” on the closing day.

Notable Quotes

• Sean Morrison, CEO: “The successful completion of this offering provides us with significant liquidity to strengthen our balance sheet, expand our royalty portfolio and continue delivering predictable cash flow to shareholders.”
• Greg Gutmanis, President & CFO: “We are pleased with the strong investor support for these convertible debentures, which will enhance our financial flexibility as we pursue further royalty acquisitions.”