On May 21, 2019, Diversified Royalty Corp. (“DIV”) completed its royalty transaction with Mr. Mikes Restaurants Corporation (“Mr. Mikes”).  As part of the transaction, DIV indirectly acquired the trademarks and other intellectual property rights utilized by Mr. Mikes in its business (the “Mr. Mikes Marks”) and subsequently licensed the use of such intellectual property back to Mr. Mikes for an initial royalty of approximately $3.9 million per annum (the “Transaction”). The total purchase price for the Mr. Mikes Marks was approximately $43.2 million.  Following the closing of the Transaction, a subsidiary of DIV entered into a senior credit facility with a senior Canadian bank for $10.3 million to refinance a portion of the purchase price.

DIV is a multi-royalty corporation, engaged in the business of acquiring top-line royalties from well-managed multi-location businesses and franchisors in North America. DIV’s objective is to acquire predictable, growing royalty streams from a diverse group of multi-location businesses and franchisors.

Founded in 1960, Mr. Mikes is a full service casual dining restaurant with a primary focus of providing hearty and affordable creations from its signature steaks and Mikeburgers® to home-branded wines and beers. At the time of the acquisition, Mr. Mikes operated 42 casual steakhouse restaurants, primarily in smaller western Canadian communities (British Columbia – 15 locations, Alberta – 15 locations, Saskatchewan – 7 locations, Manitoba – 3 locations, Ontario – 2 locations).

DIV was represented by a Farris transaction team including members of our M&A, Corporate Finance & Securities and Banking & Financial Services groups.