Completes aquisition raises dividend Diversified Royalty Corp. has completed its previously announced transaction with Nurse Next Door Professional Homecare Services Inc. to add a fifth royalty stream to Diversified Royalty's portfolio. Diversified Royalty's subsidiary, NND Royalties LP (NND LP), acquired the trademarks and certain other intellectual property rights utilized by Nurse Next Door in its premium home care business for a purchase price of $52.0-million, excluding a retained interest provided to Nurse Next Door through the issuance of limited partnership units of NND LP.
The cash purchase price of $52.0-million was financed with $44.5-million of Diversified Royalty's cash on hand and $7.5-million of senior debt provided by a Canadian chartered bank under a new credit facility having a maximum borrowing capacity of $14.5-million. In addition to the cash portion of the purchase price, NND LP issued the exchangeable units to Nurse Next Door as a retained interest having an agreed value of $23.0-million.
Immediately following the closing of the acquisition, Diversified Royalty licensed the NND rights back to Nurse Next Door for 99 years, in exchange for an initial royalty payment of $4.8-million per annum. The royalty will grow contractually at a rate of 2 per cent per annum during the term of the licence.
Dividend increase
Given the successful completion of the transaction, Diversified Royalty's annual dividend will increase from 22.25 cents per share to 23 cents per share as previously announced in Diversified Royalty's news release dated Nov. 1, 2019. The dividend increase will take effect commencing with the December, 2019, dividend.