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Farris LLP: Vancouver's Law Firm


30 June 2015

Farris represents Diversified Royalty Corp. in acquisition of Second Royalty Stream

On June 19, 2015, Diversified Royalty Corp. (TSX:DIV) announced the completion of its transaction with Sutton Group Realty Services Ltd. (“Sutton”) to acquire the Canadian and U.S. trademarks and certain other intellectual property rights utilized by Sutton in its business (the “Sutton Marks”) for $30.6 million.  Immediately following the closing of the transaction, DIV licensed the Sutton Marks back to Sutton for 99 years, in exchange for an initial royalty payment of $3.5 million per annum.

Founded in 1983, Sutton is among the leading residential real estate firms in Canada, with over 8,200 agents and 200 offices across the country. Sutton is a franchise business with a history of innovation and a tradition of leadership in the residential real estate industry. Sutton began with a revolutionary business idea (charging REALTORS®, or “agents”, a low fixed monthly fee) that remains current and relevant after over 30 years. Sutton has a very strong presence in BC and Quebec (together representing 45% of their total agents). Ontario currently represents approximately 40% of Sutton’s agents while Alberta represents fewer than 5% of Sutton’s agents.

DIV is a multi-royalty corporation, engaged in the business of acquiring top-line royalties from well-managed multi-location businesses and franchisors in North America. DIV’s objective is to acquire predictable, growing royalty streams from a diverse group of multi-location businesses and franchisors.  DIV completed its first royalty acquisition in September 2014 with the acquisition of Canadian and U.S. trademarks and certain other intellectual property rights from Franworks Franchise Corp.

DIV was represented on the Sutton transaction by a Farris transaction team led by Bradley A. Newby, and including David J. Selley (banking), Robert Veitch (securities) and Arik Broadbent (corporate).

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