On November 15, 2022, Diversified Royalty Corp. (“DIV”) announced the closing of its previously announced agreement with SBS Franchising, LLC (“Stratus”) of North Hollywood, California to add its seventh royalty stream to DIV’s portfolio and DIV’s first royalty stream based primarily in the United States. Stratus is a franchisor that offers master franchises for commercial cleaning services and building maintenance services in the United States and Canada under the “Stratus Building Solutions” system and trademarks, and also manages and operates certain master franchises through its affiliates in the United States. A DIV’s subsidiary, Strat-B Royalties Limited Partnership (“Strat-B LP”), acquired Stratus’ worldwide trademark portfolio and certain other intellectual property rights utilized by Stratus in its business (the “Stratus Rights”) for a purchase price (the “Purchase Price”) of US$59.4 million, subject to adjustment if certain conditions are met (the “Acquisition”). The Purchase Price was funded with approximately C$47.0 million drawn from DIV’s existing undrawn acquisition facility, a C$15 million increase in the senior credit facilities of DIV’s subsidiary ML Royalties Limited Partnership, and a new US$15 million senior credit facility issued to Strat-B LP.

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.

DIV was represented by a Farris transaction team including Daniel Everall (M&A), James Hatton (Licensing) and David Selley (Banking).

For a copy of the full press release, click here.