Duke Royalty puts another £1.9m into New Path

Alternative capital specialist Duke Royalty announced a follow-on investment of £1.9m into its existing royalty partner New Path Fire and Security on Monday.

The AIM-traded firm said the funds would be used to support New Path's latest acquisition in the fire and security sector.

It described New Path as a well-established buy-build platform that primarily serves SME clients in the fire and security industry, with some exposure to high-end residential clients in London.

The company's operating subsidiaries had built strong reputations in their respective local territories, Duke added.

The key highlight of the investment was the acquisition of BDI Security by New Path, which specialises in providing installation and maintenance services in the areas of CCTV and access control, automatic number plate recognition (ANPR), and barrier access for commercial customers.

By facilitating the acquisition, Duke said its funds would enable New Path to further expand its capabilities and strengthen its market position.

With the latest investment, Duke's total investment in New Path reached £6.9m.

The investment terms remained consistent with Duke's initial investment, which included a starting yield of 13.5% and an annual revenue adjustment factor of plus or minus 6% for royalty payments.

“We are pleased to support New Path as it executes its 'buy-and-build' strategy,” said chief executive officer Neil Johnson.

“New Path has sourced and acquired a target that shares both existing revenue streams with the group and adds new capabilities, at an attractive EBITDA multiple.

“New Path's stated acquisition criteria give us confidence about their disciplined approach to growth, and BDI is a good case study.”

At 1558 BST, shares in Duke Royalty were up 2.33% at 33p.

Reporting by Josh White for Sharecast.com.