Date Closed

February 21, 2020

Lead Office

Vancouver

Value

44.00 Million CAD

On February 21, 2020, Oxford Learning Centres, Inc. ("Oxford") completed its previously announced agreement with Diversified Royalty Corp. ("DIV") to add a sixth royalty stream to DIV's portfolio. DIV's wholly-owned subsidiary OX Royalties Limited Partnership acquired the trademarks and certain other intellectual property rights utilized by Oxford in its pre-school, elementary and secondary school and post-secondary supplemental education business for C$44 million. The purchase price excludes a retained interest provided to Oxford through the issuance of limited partnership units of OX Royalties LP having an agreed value of approximately $33,000.

The C$44 million purchase price was funded with C$37.0 million drawn from DIV’s previously undrawn C$50 million revolving acquisition facility and DIV’s cash on hand following DIV’s drawdown of the remaining C$7.0 million of available capacity under the existing credit facility secured in connection with the Nurse Next Door trademarks and royalty. 

At the closing of the transaction, DIV licensed the intellectual property rights back to Oxford for 99 years, in exchange for an initial royalty equal to 7.67% of the gross sales from Oxford’s 146 franchise and corporate locations in Canada and the United States included in the initial royalty pool.

DIV is a multi-royalty corporation, engaged in the business of acquiring top-line royalties from  businesses and franchisors in North America.

Oxford is one of Canada’s leading franchised tutoring services with 155 locations globally.

McCarthy Tétrault LLP advised Oxford with a team led by Robin Mahood that included Barbara Wang (Business) and Vincent Yip (Intellectual Property).