Triple Flag Precious Metals Corp. and Maverix Metals Inc. announced that they have entered into a definitive agreement (the “Agreement”) in which Triple Flag will acquire all of the issued and outstanding common shares of Maverix pursuant to a Plan of Arrangement (the “Transaction”), positioning Triple Flag as the leading emerging senior streaming and royalty company.
The Transaction will combine two complementary portfolios of predominantly gold and silver streams and royalties, creating a company that will:
This combination – which is expected to be accretive on a NAV-per-share and cash-flow-per-share basis – represents a continuation of each company’s focus on building a pure play portfolio of high-quality, precious metals streaming and royalty assets, located in good mining jurisdictions and in the hands of responsible operators. We believe that the combined company will benefit from the strong cash flows of the resulting high-margin, high-growth, inflation-resilient, and diversified portfolio.
We anticipate that the combination with Maverix will also diversify Triple Flag’s portfolio and shareholder base while providing a significant and immediate increase in GEOs, building on Triple Flag’s 26% CAGR in GEOs since 2017 and providing further opportunities to grow.
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 consideration of US$3.92 per Maverix share based on the closing price of Triple Flag shares on November 9, 2022 of US$10.89 (the “Purchase Price”). 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. Maverix shareholders who do not elect to receive either Triple Flag shares or cash will be deemed to elect default consideration of 0.360 Triple Flag shares per Maverix share.
The exchange ratio implies a premium of 10% based on the closing share prices of Triple Flag and Maverix on the New York Stock Exchange (“NYSE”) on November 9, 2022, and a premium of 22% based on the 10-day volume-weighted average share prices (“VWAP”) of Triple Flag and Maverix on the NYSE as of November 9, 2022. The Purchase Price implies a total equity value for Maverix of US$606 million on a fully diluted basis.
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. Triple Flag shareholder Elliott Investment Management L.P. and Maverix shareholders Newmont Corporation, Pan American Silver Corp. and Kinross Gold Corporation are all supportive of the combination, reflecting their belief in the value and potential of the combined company.
The combined company will continue as Triple Flag Precious Metals Corp., headquartered in Toronto, Ontario, and will be led by Shaun Usmar as CEO. Following the completion of the Transaction, it is expected that Geoff Burns, founder and Chair of Maverix, and another nominee of Maverix will join the Triple Flag board of directors. 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.
Commenting on today’s announcement, Shaun Usmar, Founder and CEO of Triple Flag 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. The combination builds on Triple Flag’s 26% compound annual growth rate in GEOs over the past five years, increasing from 84 koz in 2021 to an expected average of over 140 koz over the next five years, before factoring in the additional organic growth potential from the significant portfolio of exploration and development stage assets. Our liquidity position of over US$600 million and strong cash generation from the combined portfolio’s 90% cash margins, provide the ability to pursue further valuable growth through acquisitions and compete for the best opportunities in the sector. The combination is expected to be immediately accretive to Triple Flag’s net asset value and cash flow per share, while targeting US$7 million in annual pre-tax synergies. Both sets of shareholders will benefit from our enhanced scale, diversification, growth outlook and trading liquidity.”
Commenting on today’s announcement, Geoff Burns, founder and Chair of Maverix, said:
“The merger of Maverix and Triple Flag represents that rare opportunity to combine the best with the best. Since their respective inceptions, roughly 6.5 years ago, both companies have steadfastly stuck to their objectives of building pure play precious metals streaming and royalty companies, while simultaneously exercising prudent financial discipline. 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. The industrial logic behind this combination is inescapable.”
We believe the Transaction will have the following benefits:
Under the terms of the Agreement, the Transaction will be carried out by way of a court-approved Plan of Arrangement under the Canada Business Corporations Act, and will require the approval of at least (i) 66 2/3% of the votes cast by the shareholders of Maverix at a special meeting and (ii) if required, minority shareholder approval in accordance with Multilateral Instrument 61-101.
Newmont Corporation and Pan American Silver Corp., together with all of the officers and directors of Maverix, collectively control approximately 57% of the common shares of Maverix on a fully diluted basis and have entered into voting and support agreements pursuant to which they have agreed to vote their shares in favor of the Transaction.
As the Triple Flag shares to be issued to the shareholders of Maverix in the Transaction will exceed 25% of the issued and outstanding common shares of Triple Flag, Triple Flag shareholder approval of the Transaction is required under Section 611(c) of the rules of the TSX. Triple Flag is relying on the exemption in Section 604(d) of the rules of the TSX, whereby instead of holding a shareholder meeting, Triple Flag has obtained the written consent for the Transaction of shareholders of Triple Flag holding greater than 50% of the issued and outstanding common shares of Triple Flag.
Entities controlled by Elliott Investment Management L.P., which control approximately 83% of the issued and outstanding common shares of Triple Flag, have entered into voting and support agreements pursuant to which they have provided written consent to the Transaction, and have agreed, if required, to vote their shares in favor of the Transaction at a Triple Flag shareholder meeting. Each of the officers and directors of Triple Flag have also entered into voting and support agreements, pursuant to which they have agreed to vote their shares in favor of the Transaction in the event of a Triple Flag shareholder meeting.
Completion of the Transaction is also subject to regulatory and court approvals and other customary closing conditions. The Agreement includes customary provisions, including non-solicitation by Maverix of alternative transactions, a right of Triple Flag to match superior proposals and an approximately $24 million termination fee, payable under certain circumstances.
Complete details of the Transaction will be included in a management information circular to be delivered to Maverix shareholders in the coming weeks. Subject to receiving requisite court approval, the special meeting of shareholders of Maverix is expected to be held in early January 2023 and the Transaction is also expected to close in January 2023. In connection with and subject to closing the Transaction, it is expected that the common shares of Maverix will be delisted from the TSX and the NYSE American and that Maverix will cease to be a reporting issuer under Canadian and U.S. securities laws.
The Board of Directors of Triple Flag and the Board of Directors of Maverix have unanimously approved the Transaction and the Board of Directors of Maverix recommend that Maverix shareholders vote in favor of the Transaction.
Raymond James Ltd. and CIBC have each provided a fairness opinion dated November 9, 2022, to the Board of Directors and a strategic committee of Maverix stating that, as of the date of such opinion, and based upon and subject to the assumptions, limitations and qualifications stated in such opinion, the consideration to be received by the shareholders of Maverix under the Transaction is fair, from a financial point of view, to shareholders of Maverix.
National Bank Financial is acting as financial advisor to Triple Flag and Torys LLP is acting as legal counsel to Triple Flag.
Raymond James is acting as financial advisor to Maverix and Blake, Cassels & Graydon LLP and Davis Graham & Stubbs LLP are acting as Canadian and U.S. legal counsel, respectively to Maverix. CIBC provided a fairness opinion to the Maverix Board of Directors.
Triple Flag and Maverix will hold a joint conference call and webcast on November 10, 2022 at 10:00 a.m. ET (7:00 a.m. PT) to discuss the Transaction. Participants may dial in using the numbers below.
Date and Time:
November 10th, 2022, at 10:00 a.m. ET (7:00 a.m. PT)
Use the link below to register for the call and to receive your individual conference call login information:
Replay (Until November 24th):
Toll-Free (U.S. & Canada): +1 (800) 770-2030
International: +1 (647) 362-9199
Triple Flag is a pure play, gold-focused, emerging senior streaming and royalty company. We offer bespoke financing solutions to the metals and mining industry with exposure primarily to gold and silver in the Americas and Australia, with a total of 80 assets, including 9 streams and 71 royalties. These investments are tied to mining assets at various stages of the mine life cycle, including 15 producing mines and 65 development and exploration stage projects. Triple Flag is listed on the TSX and the NYSE under the ticker “TFPM”.
Maverix is a gold-focused royalty and streaming company with a globally diversified portfolio of over 148 assets. Maverix’s mission is to increase per-share value by acquiring precious metals royalties and streams. Maverix’s shares are listed on the NYSE American and the TSX under the symbol “MMX”.
Vice President, Evaluations & Investor Relations
+1 (416) 304-9770
Manager of Investor Relations
+1 (604) 343-6225
Gordon Poole, Camarco
Tel: +44 (0) 7730 567 938