This acquisition is expected to strengthen Triple Flag’s position as the world’s fourth-largest senior streaming and royalty company.
The merged business will retain the Triple Flag Precious Metals Corp. brand and is projected to have a more diversified portfolio offering ‘strong’ cash flows.
The combined business will remain based in Toronto, Ontario, and own 29 paying assets and 228 overall assets.
Triple Flag expects the consolidation to add to its net asset value and cash flow per share, further stating that the merged company will have ‘greater scale’.
Under the definitive agreement, Maverix shareholders will have the option to receive either $3.92 in cash or 0.360 of a Triple Flag share for each share held in Maverix.
This represents a 10% premium to Maverix’s last close.
In a press statement, Triple Flag said: “The shareholder election will be subject to pro-ration such that the cash consideration will not exceed 15% of the total consideration and the share consideration will not exceed 85% of the total consideration.”
However, Maverix shareholders not opting for either Triple Flag shares or cash will have to accept a default consideration of 0.360 Triple Flag shares for each share held.
Triple Flag founder and CEO Shaun Usmar said: “This transaction creates the world’s leading gold-focused emerging senior streaming and royalty company, bringing together two complementary portfolios in a compelling combination.
“Triple Flag’s portfolio, with a strategic emphasis on larger, cash-generating assets, with more than 90% by NAV associated with producing mines, is complemented by Maverix’s highly diversified portfolio of 148 royalties and streams, with paying assets equating to around 60% of NAV.”
Upon deal completion, which is anticipated in January 2023, Triple Flag shareholders will own a 77% stake in the combined entity while Maverix shareholders will hold the remaining 23% interest.
In accordance with the agreement, Triple Flag would be allowed to match superior proposals and receive a $24m termination fee.
The deal is currently pending regulatory and court clearances.
It has already received the approval of the two companies’ boards, with the Maverix board recommending that Maverix shareholders vote in the deal’s favour in the special meeting scheduled in January next year.
Maverix founder and chair Geoff Burns said: “The increased scale of the combined company, with its highly complementary portfolios and a knowledgeable and supportive shareholder base, will provide real competitive advantages and should attract a premium valuation, to the benefit of both sets of shareholders.”