Maverix Metals Inc (TSX:MMX) shares have soared after the streaming company announced it has entered into an agreement to be acquired by Triple Flag Precious Metals (TSX:TFPM) Corp, in a US$600 million deal.
The transation positions Triple Flag as the leading emerging senior streaming and royalty company.
In a joint statement, the companies said that the transaction will combine two complementary portfolios of predominantly gold and silver streams and royalties.
READ: Maverix Metals says it is well on way to meeting 2022 gold-selling guidance after strong 3Q
It will create a company that can deliver increased scale and enhanced diversification, with 29 paying assets and 228 assets overall, and will feature gold and silver assets in good mining jurisdictions, with 93% of the portfolio comprising precious metals and 82% located in the Americas and Australia, they said.
Following the announcement, Maverix's US-listed shares were up 9.8%, while its Canadian shares had risen 9.6% at mid-morning on Thursday. Triple Flag's NYSE-listed shares also rose about 1.2%.
The two companies said that the combined company will continue as Triple Flag Precious Metals (TSX:TFPM) Corp, headquartered in Toronto, Ontario, and will be led by Triple Flag's Shaun Usmar as CEO.
It is expected that Maverix founder and chair Geoff Burns and another nominee of Maverix will join the Triple Flag board of directors.
Burns said that the merger of Maverix and Triple Flag represented a rare opportunity to combine the best with the best.
“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,” he said.
Usmar added: “Both sets of shareholders will benefit from our enhanced scale, diversification, growth outlook and trading liquidity.”
Transaction details
Pursuant to the transaction, Maverix shareholders may elect to receive either US$3.92 in cash or 0.360 of a Triple Flag share per Maverix share held, representing share consolidation of US$3.92 per Maverix share based on the closing price of Triple Flag shares on November 9, 2022, of US$10.89.
Upon completion of the transaction, existing Triple Flag and Maverix shareholders would own approximately 77% and 23% of the combined company, respectively, on a fully diluted basis.
The combined company will continue to pay an annualized dividend of US$0.20 per Triple Flag share, resulting in an effective dividend increase of over 40% for Maverix shareholders pro forma, based on the exchange ratio.
Complete details of the transaction will be included in a management information circular to be delivered to Maverix shareholders in the coming weeks, the two companies said.
Pending a special meeting of shareholders of Maverix expected to be held in early January 2023, the transaction is expected to close in January 2023.
Further details can be found here.
Maverix Metals is a gold-focused royalty and streaming company with a globally diversified portfolio of more than 148 assets.
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