Triple Flag Precious Metals Corp. has reached an agreement to acquire Maverix Metals Inc. for $606 million. The transaction would further strengthen Triple Flag’s position as an emerging royalty company by combining two complementary portfolios of predominantly gold and silver streams and royalties. Triple Flag would have 29 paying assets and 228 assets overall, most of which are located in the Americas and Australia.
“The combination builds on Triple Flag’s 26% compound annual growth rate in gold equivalent ounces over the past five years, increasing from 84,000 oz in 2021 to an expected average of more than 140,000 oz over the next five years, before factoring in the additional organic growth potential from the significant portfolio of exploration and development stage assets,” said Shaun Usmar, founder and CEO of Triple Flag. “Our liquidity position of more than $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.”
Pursuant to the transaction, Maverix shareholders would receive either $3.92 in cash or 0.360 of a Triple Flag share for each share of Maverix held, representing share consideration of $3.92 per Maverix share based on the closing price of Triple Flag shares on November 9, 2022 of $10.89. Triple Flag and Maverix shareholders would own approximately 77% and 23% of the combined company respectively. Triple Flag shareholder Elliott Investment Management L.P. and Maverix shareholders Newmont Corp., Pan American Silver Corp. and Kinross Gold Corp. support the transaction.
The combined company will continue as Triple Flag Precious Metals Corp., headquartered in Toronto, Canada, and will be led by Shaun Usmar as CEO. Geoff Burns, founder and Chair of Maverix, and another nominee of Maverix will join the Triple Flag board of directors.
Completion of the transaction is 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.