Sharecast - The AIM-traded firm said Tristone provides specialist residential and domiciliary care in two end markets, with the first being high-acuity adults with severe mental, physical or learning disabilities.
It said the second market was care leavers, aged between 16 and 19, who are transitioning out of social care and into independent living.
Duke said its funds would facilitate Tristone's acquisition of K Bond Healthcare, trading as Next Steps, which it described as a “well-respected residential and nursing care provider” with operations across Greater Manchester.
The financing increased Duke's total investment into Tristone to £17.6m.
It said the investment terms were the same as its previous follow-on investment into Tristone, including a starting yield of 13.5% and a 6% annual revenue adjustment factor over royalty payments due.
Next Steps represented Tristone's third acquisition supported by Duke, in line with Tristone's stated buy-and-build strategy.
“It is great to be supporting Tristone's acquisition of another successful company with this follow-on funding,” said chief executive officer Neil Johnson.
“Next Steps provides the highest quality of care and maintains a culture that aligns well with Tristone's own core set of beliefs.”
Johnson said the acquisition represented an “important strategic step” in expanding Tristone's geographical presence in the north west of England, adding that there was scope to open further facilities, replicating Next Steps' “existing and highly successful” model.
“Our flexible financing model is perfect for companies such as Tristone which are executing an effective buy and build strategy and our shareholders benefit from the growth that we achieve through expanding our relationship with a trusted partner.”
At 1230 GMT, shares in Duke Royalty were down 2.13% at 35.92p.
Reporting by Josh White for Sharecast.com.