VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 24, 2017) - Royalty North Partners Ltd. (TSX VENTURE:RNP) ("RNP" or the "Company") is pleased to announce that it has entered into a loan agreement (the "Agreement") with a newly formed entity based in British Columbia ("AcquireCo") which will acquire (the "Acquisition") the outstanding shares of Advance Wire Products Ltd. ("Target" or the "Purchased Business"). Immediately upon completion of the Acquisition, AcquireCo and the Target will amalgamate, with the amalgamated entity ("AWP") continuing to operate the Purchased Business.

The Target, headquartered in Surrey, BC, has been specializing in the design, prototyping and manufacturing of display fixtures and merchandising solutions since 1953. These highly specialized solutions are customized to meet clients' design and functionality requirements and can include various materials such as wood, wire, metal, and plastic. RNP has worked with the Target's existing management team (who will all be equity owners of AWP upon close of the transaction) to focus on maintaining the Target's existing customer base as well as growing the business by increasing sales to new and existing customers across North America.

Under the terms of the Agreement, RNP will loan C$6,800,000 (the "Loan") to AcquireCo upon receipt of all authorizations required in connection with the Loan and completion, to its satisfaction, of its due diligence review and review of the terms of the Acquisition. The Loan will be repaid by way of monthly loan payments equal to a minimum annual loan payment (the "Fixed Payment") plus a percentage of the gross sales (the "Variable Payment") of AWP. The Fixed Payment is C$408,000 and the initial Variable Payment will be 4.35% of gross sales. The Loan proceeds, along with equity proceeds contributed by AcquireCo management and RNP (the "Equity Contribution"), will be used by AcquireCo for the purchase price payable for the Purchased Business. RNP's Equity Contribution over and above the Loan amount will be C$200,000. RNP expects to fund the Loan and Equity Contribution through the issuance of unsecured convertible debentures (the "Debentures", see details below) as well as a further draw-down of the Company's senior credit facility. This Agreement will represent RNP's fourth royalty investment since RNP initiated its change of business last year.

Justin Currie, Chief Executive Officer at RNP, commented: "We are pleased to be able to support the management buy-out of a local high-quality legacy business. The management team has been successfully operating the business for the last number of years and it makes a lot of sense to see them in a position of ownership. Michael McAdam, whom I have known for many years, will be the new President of AWP post-close and I have a high degree of confidence in his ability to elevate this great business to new levels going forward. Furthermore, this transaction will add significant value for our existing shareholders without near-term share dilution and bolster our existing royalty investment portfolio."

Michael McAdam, the future President of AWP, stated: "We are excited to be partnering with RNP on this transaction as their financing structure is particularly well-suited to management buy-out situations. They are a value-add partner who is aligned for growth and will allow us to acquire a 100% equity interest in the Target while maintaining reasonable debt service levels and without numerous restrictive covenants."

Unsecured Convertible Debentures

In connection with the Agreement and subject to the approval of the TSX Venture Exchange (the "TSXV") and the Company's senior lender of the terms of the subordination of the Debentures to the Company's senior indebtedness, the Company will undertake a placement (the "Offering") of unsecured convertible debentures (the "Debentures") in the amount of up to C$6,000,000. The Debentures will have a three (3) year term at which time they mature and become due and payable. The Debentures will bear interest at 8% per annum payable quarterly and allow holders of the Debentures to convert their principal amount into common shares of RNP (the "Shares") at a price of C$0.20 per Share at any time prior to the close of business on the earlier of the business day immediately preceding maturity and the business day immediately preceding the date fixed for redemption of the Debentures. Holders converting their Debentures will, in addition to the applicable number of Shares to be received on conversion, receive a cash payment for accrued and unpaid interest for the period from the last interest payment date prior to the date of conversion to the date of conversion. RNP may prepay the outstanding principal amount of the Debentures together with all accrued and unpaid interest at any time prior to the maturity date of the Debentures according to a pre-payment premium schedule.


The Agreement, Equity Contribution and the Debentures are all subject to customary approvals including approval by RNP's board of directors and the TSXV.

On behalf of the Company,
"Justin Currie"
Chief Executive Officer and Director

About Royalty North Partners Ltd.

Royalty North Partners is a Vancouver, BC based, TSX-V listed (RNP) company focused on creating a diversified portfolio of cash flowing royalties by providing financing to private businesses operating in the "mid-market". RNP is led by a seasoned board and management team with a successful track record of experience in royalty financing, capital markets transactions and private company operations. RNP is targeting royalty investments in companies with stable cash flow in non-resource based sectors looking for growth/acquisition capital, recapitalization or succession liquidity.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note Regarding Forward-Looking Statements

Except for the statements of historical fact contained herein, the information presented constitutes "forward looking statements" within the meaning of certain securities laws, and is subject to important risks, uncertainties and assumptions. The words "may", "could", "should", "would", "suspect", "outlook", "believe", "anticipate", "estimate", "expect", "intend", "plan", "target" and similar words and expressions are used to identify forward-looking information. Forward-looking statements contained in this press release include statements regarding the acquisition by AcquireCo of the Purchased Business, the amalgamation of AcquireCo and the Target, the advancement of the Loan from RNP to AcquireCo, the satisfaction of the conditions under the agreement by AcquireCo, the repayment of the Loan, the use of proceeds of the Loan, the completion of the Offering and the future management of AWP. The forward-looking information in this news release describes the Company's expectations as of the date of this news release and accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements, including the risks, uncertainties and other factors identified in the Company's periodic filings with Canadian securities regulators, and assumptions made with regard to, among other things, the anticipated decision of the Board of Directors of the Company to approve the Offering and the ability to raise sufficient capital under the Offering. While the Company may elect to, it does not undertake to update this information at any particular time except as required by law. RNP does not provide any representation as to its comparability with other companies in similar industries including, but not limited to, Alaris Royalty Corp., Diversified Royalty Corp., Founders Advantage Capital Corp., Sandstorm Gold Ltd., and Franco-Nevada Corporation.

Contact Information:

Chris Buss
Chief Investment Officer and Director
Royalty North Partners Ltd.
(604) 628-1101