Uranium Royalty Enters Merger Agreement with Sweetwater, Valued at Approximately $1.9B
Uranium Royalty has entered into an arrangement agreement to combine with entities owning a 92% interest in Sweetwater Royalties from funds managed by Orion Resource Partners and the Ontario Teachers' Pension Plan. The transaction implies a 100% enterprise value for Sweetwater of approximately $1.9B and an attributable equity value to be acquired by URC of approximately $1.1B. Under the Transaction, Sweetwater and URC will combine under a newly formed U.S. domiciled parent company, "Uranium Royalty Corp." or "New URC", which will apply to have its shares of common stock listed on NASDAQ. On completion of the transaction, the Sellers will receive approximately $330M in cash and $813M in New URC Shares at a deemed value of $3.64 per New URC Share. The transaction is expected to transform URC into the largest publicly traded U.S. non-precious metals royalty company. The combination is also expected to be significantly accretive to NAV, cash flow and EPS. Upon closing, Orion and Ontario Teachers' are expected to hold approximately 43% and 16% respectively of New URC's pro forma shares outstanding. The sellers' ownership interests in Sweetwater will have been exchanged for total cash consideration of $330M and $813M in New URC Shares, issued at a share price of $3.64. A shareholder meeting is expected to occur on or about July with closing thereafter subject to regulatory approvals. Orion and Ontario Teachers' will have pro rata Board nomination rights with rights for up to two directors joining from Orion and one from Ontario Teachers'. The resulting combined representation will be capped below 50%. Following completion of the transaction, URC will continue to be led by Scott Melbye as CEO and Amir Adnani as Chairman. Sweetwater will continue to operate under the leadership of CEO Damon Barber. It is expected that the meeting of URC shareholders to approve the transaction and closing will occur on or about Q3.
