Diversified Royalty (DIV) investor relations material

Deal rationale and strategic fit

• Acquisition of a leading Canadian automotive service franchisor for $235M expands exposure to a high-performing partner with strong same-store sales growth and EBITDA CAGR over the past decade.

• The transaction accelerates growth, leveraging a proven franchise model and market leadership in quick lube services.

• Mr. Lube + Tires has demonstrated robust same-store sales growth (7.2% average over 10 years) and a 14.7% CAGR in Adjusted EBITDA.

• Management's continued equity stake signals confidence in future performance and alignment of interests.

• The deal aligns with DIV’s focus on royalty financing for North American franchisors.

Financial terms and conditions

• Purchase price is $235M, funded by $212.5M in new senior debt, $13.7M private placement, $20.6M rolled management equity, $34M cash on hand, and $41.1M from an acquisition facility.

• Non-management equity holders receive ~3.4M shares at $3.98/share; management retains a ~4% interest.

• Estimated transactional costs are $2M.

• Mr. Lube + Tires will provide an $11.6M non-interest-bearing loan to fund GST related to the acquisition.

Synergies and expected cost savings

• Estimated Adjusted EBITDA for the combined business is $58.7M in the 12 months post-closing, up from $45.9M in 2025, reflecting synergies and operating leverage from new store growth.

• Pro-forma distributable cash per share projected to increase from $0.3128 to $0.3478, an 11.2% rise.

• DIV expects to benefit from continued same-store sales growth and operating leverage from new store openings.