|By Marketwired .||
|June 17, 2014 05:03 PM EDT||
TORONTO, ONTARIO -- (Marketwired) -- 06/17/14 -- Grenville Strategic Royalty Corp. (TSX VENTURE: GRC) ("Grenville") is pleased to provide an interim update on the development of its growing royalty portfolio and concurrently announce that it has completed the purchase of a gross sales royalty from Mera Development Corporation ("Mera"), an energy and food engineering services and solutions business.
Grenville management is pleased to provide an interim update on the progress of the company in the building out of its royalty portfolio. In less than one year, Grenville has gone from a concept company to just over $10mln of capital invested across 13 investments in 10 individual companies. The portfolio now has broad exposure across several highly diverse and uncorrelated industries in Canada and the United States, including e-learning, building materials, building and infrastructure management, automotive, water infrastructure, energy services, and now, with the addition of Mera, energy and food engineering.
"Since Grenville established itself as a public company earlier this year, which required considerable management and board time and effort, there has been a substantial strengthening in a number of critical relationships within the Canadian capital markets - firms that see the capital market gap we're seeking to address," said Steven Parry, Grenville's Executive Chairman. "The velocity of deal flow and transactions being closed are steadily increasing, as is our team's ability to execute more efficiently with each portfolio addition. This is being matched by a growing list of quality companies interested in exploring our royalty-based financing solution. As Grenville's pipeline of opportunities continues to expand this capital market support remains an important factor in our success."
Mera Royalty Agreement
Mera is a Regina, Saskatchewan-based provider of engineering solutions focusing on the energy and food sectors. Mera is a leader in collaborating with its global client base to develop solutions that utilize technology and data management as a competitive advantage to improve performance.
"Mera is a solid addition to the Grenville portfolio. Mera's management and technical team have established their engineering technology service offerings within a growing list of blue-chip clients in the energy and food technology markets," said William (Bill) R. Tharp, Grenville's Chief Executive Officer. "Mera has additionally positioned itself very well for some exciting domestic and international growth opportunities. We're pleased to welcome Mera to our growing royalty portfolio and to concurrently gain exposure to its energy and food driven markets."
Wayne Goranson, Mera's Chief Executive Officer, commented: "The Grenville team put forward a commercial and fair set of terms and worked with us through to the close. Royalty financing growth really is unique - as business owners, the impact of no dilution or command-and-control covenants was very appealing."
Mera represents Grenville's 13th investment with approximately $10.05 million in royalty-based financings across Canada and the US.
Mera Development Corporation is a Regina, Saskatchewan-based company specializing in helping clients improve their performance through the application of technology. Mera focuses primarily on the energy industry and food processing.
Grenville is a Toronto-based company that was formed to provide royalty-based finance solutions by acquiring revenue streams generated by growing industrial and technology businesses. Grenville has identified a large and underserviced finance market for companies generating up to $50 million in revenue, many of which are well managed and generating improving cash flow, but face difficult financing hurdles from traditional debt and equity markets. The non-dilutive royalty financing structure offered by Grenville can bridge the financing needs of these companies until traditional debt or equity is available to them on more attractive commercial terms. The application of Grenville's royalty financing structure into sectors not traditionally serviced by royalty companies represents a new and innovative financing model - Capital Simplified - that has already attracted a considerable number of opportunities with attractive potential returns.
Forward-Looking Information and Statements
This press release contains certain "forward-looking information" within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking information and statements are not representative of historical facts or information or current condition, but instead represent only Grenville's beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Grenville's control. Generally, such forward-looking information or statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken, "will continue", "will occur" or "will be achieved". The forward-looking information contained herein may include, but is not limited to, information with respect to: prospective financial performance; expenses and operations; anticipated cash needs and need for additional financing; anticipated funding sources; future growth plans; royalty acquisition targets and proposed or completed royalty transactions; estimated operating costs; estimated market drivers and demand; business prospects and strategy; anticipated trends and challenges in Grenville's business and the markets in which it operates; and financial position.
By identifying such information and statements in this manner, Grenville is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Grenville to be materially different from those expressed or implied by such information and statements. An investment in securities of Grenville is speculative and subject to a number of risks including, without limitation, risks relating to: the need for additional financing; the relative speculative and illiquid nature of an investment in Grenville; Grenville's lack of operating history; Grenville's ability to generate sufficient revenues; Grenville's ability to manage future growth; the limited diversification in Grenville's existing investments; dependence on the operations, assets and financial health of investee companies; limited ability to exercise control or direction over investee companies; potential defaults by investee companies and the unsecured nature of Grenville's investments; Grenville's ability to enforce on any default by an investee company; competition with other investment entities; tax matters; Grenville's ability to pay dividends in the future and the timing and amount of those dividends; reliance on key personnel, particularly Grenville's founders; dilution of shareholders' interest through future financings; and general economic and political conditions. Although Grenville has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information and statements, there may be other factors that cause results not to be as anticipated, estimated or intended.
In connection with the forward-looking information and forward-looking statements contained in this document, Grenville has made certain assumptions. Assumptions about the performance of the Canadian and U.S. economies over the next 24 months and how that will affect Grenville's business and its ability to identify and close new opportunities with new investees are material factors that Grenville considered when setting its strategic priorities and objectives, and its outlook for its business. Key assumptions include, but are not limited to: assumptions that the Canadian and U.S. economies will continue to grow moderately over the next 12 to 24 months; that interest rates will not increase dramatically over the next 12 to 24 months; that Grenville's existing investees will continue to make royalty payments to Grenville as and when required; that the businesses of Grenville's investees will not experience material negative results; that Grenville will continue to grow its portfolio in a manner similar to what has already been established; that tax rates and tax laws will not change significantly in Canada and the U.S.; that more small to medium private and public companies will continue to require access to alternative sources of capital; and that Grenville will have the ability to raise required equity and/or debt financing on acceptable terms. Grenville has also assumed that access to the capital markets will remain relatively stable, that the capital markets will perform with normal levels of volatility and that the Canadian dollar will not have a high amount of volatility relative to the U.S. dollar. In determining expectations for economic growth, Grenville primarily considers historical economic data provided by the Canadian and U.S. governments and their agencies.
Although Grenville believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements.
For additional information with respect to these risks, uncertainties and assumptions, please refer to the "Risk Factors" section of Grenville's annual information form dated April 21, 2014 and the other public filings of Grenville available on SEDAR at www.sedar.com. The forward-looking information contained in this press release is made as of the date hereof, and Grenville does not undertake to update any forward-looking information that is contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward looking information and statements attributable to Grenville or persons acting on its behalf is expressly qualified in its entirety by this notice.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Grenville Strategic Royalty Corp.
William (Bill) R. Tharp
President and Chief Executive Officer
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