Duke Capital Limited (LON:DUKE), a leading provider of hybrid capital solutions for SME business owners in Europe and North America, has announced a proposed fundraising of a minimum of £15 million through the issue of new Ordinary Shares to support its next phase of growth.
Transaction Highlights
· Conditional Placing and Subscription to raise a minimum of £15 million through the issue of a minimum of 48,836,366 Placing Shares and minimum of 5,709,089 Subscription Shares at the Issue Price of 27.5p per share
· Management intends to subscribe for an aggregate of £0.82 million via the Placing and/or Subscription
· The Placing is being conducted by way of an accelerated bookbuild process which will commence immediately following this announcement, the results of which will be announced shortly
· Company has granted a Broker Option to the Joint Brokers, enabling other institutional investors and private client brokers the opportunity to participate in the Fundraising at the Issue Price, following the closing of the accelerated bookbuild, up until midday on Friday 22 November 2024
· In addition, a Retail Offer will be launched to raise up to an additional £3 million, to enable other retail investors to participate in the Fundraising at the Issue Price up until midday on Friday 22 November 2024
· The net proceeds from the Fundraising are intended to be used to enhance value within Duke’s portfolio through additional investment to support accretive near-term M&A opportunities by certain existing Capital Partners
· Additionally, following this raise, Duke will be well positioned to:
o Build EBITDA to levels where multiple expansion is realised upon exit
o Opportunistically build equity stakes in certain Capital Partners
o Take advantage of the rapidly expanding private credit market by raising new third party institutional capital for further investment
· Completion of the Fundraising is conditional, inter alia, upon Shareholder approval at the extraordinary general meeting to be held on or around 3 December 2024.
· The Issue Price represents a discount of approximately 8.94% to the closing mid-market price on 13 November 2024, being the latest practicable date before this announcement.
· Cavendish and Canaccord are acting as Joint Brokers on the Placing.
The Placing will be undertaken by way of an accelerated bookbuild with institutional investors to raise, together with a subscription of new Ordinary Shares by certain management and other existing and new shareholders, a minimum of £15 million (before expenses), at the issue price of 27.5 pence per share. In addition to those commitments for 5,709,089 Subscription Shares received by the Company as at the date of this announcement, the Company reserves the right, prior to the Extraordinary General Meeting, to enter into further subscription agreements for the issue of additional Subscription Shares to accommodate demand, further details of which would be announced separately by the Company.
The Company has also granted to Cavendish and Canaccord a broker option under which additional new Ordinary Shares may be issued to institutional investors and private client brokers who wish to participate in the Fundraising following the closing of the accelerated bookbuild. To the extent that the Broker Option is exercised, the Broker Option Shares will be issued at the Issue Price. Orders for the Broker Option must be submitted to Cavendish or Canaccord and will only be accepted from institutional investors or private client brokers. Further detail on how to participate in the Broker Option is set out below.
In addition to the Placing, Subscription and Broker Option, the Company is providing Retail Investors with the opportunity to subscribe for up to 10,909,090 new Ordinary Shares at the Issue Price, via the BookBuild Platform, to raise up to an additional £3 million (before expenses), by way of the Retail Offer. A separate announcement will be made shortly regarding the Retail Offer and its terms. The Placing is not conditional upon the Retail Offer. For the avoidance of doubt, the Retail Offer is not part of the Placing, the Subscription or the Broker Option.
The final number of new Ordinary Shares to be issued pursuant to the Broker Option, Subscription and Retail Offer will be announced following closing on or around 22 November 2024. Applications under the Broker Option and Retail Offer may be subject to scale back at the Company’s discretion.
The Fundraising is not being underwritten. The Issue Price represents a discount of approximately 8.94% per share to the mid-market closing price of 30.2 pence on 13 November 2024, being the latest practicable date prior to publication of this announcement.
Cavendish Capital Markets Limited and Canaccord Genuity Limited are acting as Joint Brokers in relation to the Placing.
A circular, containing further details of the Fundraising and notice of the Extraordinary General Meeting to be held at 11.00 a.m. on 3 December 2024 to, inter alia, approve the resolution required to implement the Fundraising, is expected to be published and despatched to Shareholders shortly. Following its publication, the Circular will be available on the Group’s website at https://dukecapital.com/investors/
Unless otherwise defined, capitalised terms in this announcement shall have the meaning as set out in the Definitions section, contained within the Appendix to this announcement.
Neil Johnson, CEO of Duke Capital, said:
“Over the last 3 years of interest rate hikes, 40-year high inflation and global uncertainty, I am proud to say that Duke has continued to deliver. With these funds, we will be positioned to continue supporting our partners with buy and build strategies, who have identified acquisitions at attractive EBITDA multiples. As such, we are motivated to execute on the array of near term growth opportunities available to us and this placing will create additional value across our portfolio in the short term, while also enabling us to achieve a strong strategic step in delivering our broader growth plan.
“In addition, the opportunity within the private credit market has expanded significantly and has almost tripled to US$1.4 trillion in the past decade. As such, we continue to pursue our third-party funding strategy and are pleased with the interest shown by multi-billion-dollar capital providers. Our success in this strategy will eliminate cash drag, represent accretive fee-based revenue and reduce Duke’s dependence on the equity markets, thereby minimising dilution and enabling us to execute on strategic growth opportunities more rapidly and at scale. This is an exciting time for Duke Capital, and I am pleased to present this opportunity to all our shareholders.”
