DRI Healthcare Trust files for US $400M IPO and con-current private placement

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By Ted Liu

DRI Capital Inc. has filed a final prospectus in connection of the proposed initial public offering of trust units of DRI Healthcare Trust.

DRI Healthcare Trust is a newly formed entity created to provide unitholders with differentiated exposure to the pharmaceutical and biotechnology industries through the ownership and acquisition of pharmaceutical royalties.

The offering price is anticipated to be between US $10.00 and US $11.00 per unit. DRI Capital expects to receive combined gross proceeds of approximately US$401 million from the offering and concurrent private placement. (all dollar figures in US dollar)

Assuming offering price of $10.00 per unit, approximately 40,100,000 units pursuant to the offering and the private placement or approximately 45,600,000 units if the over-allotment option is exercised in full.

DRI Healthcare Trust units have been approved for listing on the Toronto Stock Exchange (TSX) in Canadian dollars under the symbol “DHT.UN” and in U.S. dollars under the symbol “DHT.U.”

DRI Capital currently manages Drug Royalty I, Drug Royalty II, Drug Royalty II CIF (RMF 2 Co-Investment Fund) and Drug Royalty III. Between 2006 and 2018, these funds acquired 61 royalty streams on 37 products. During this time, approximately $2 billion of capital was deployed from the funds, which was supplemented by an additional $160 million of cash sourced from co-investors, for total purchases of over $2.1 billion.

DRI Capital said between 2006 and September 30, 2020, funds managed by DRI Capital generated $2.5 billion of cash royalty receipts.

DRI Capital currently intends to devote substantially all of its time working for the benefit of the Trust as the manager.

DRI Healthcare Trust will acquire the seed assets on closing using cash of approximately $292.7 million from the offering and the private placement. In addition, DRI Healthcare Trust will assume certain outstanding securitization indebtedness associated with the Seed Assets of approximately $69.1 million as of January 15, 2021.

The seed assets consist of 18 royalty streams on 14 products from Drug Royalty I, Drug Royalty III and RMF 2.


RI Healthcare Trust will issue 36,527,000 units at US $10 per unit for gross proceeds of US $365,270,000, as part of offering. Together with con-current private placement, DRI Healthcare Trust will issue 40,107,407 units (or 45,586,457 units if the over-allotment option is exercised in full) for US $401.074 million (US $455.865 million).

The offering is expected to close on or about February 19, 2021.