Situation

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A private equity company engaged WWM to investigate the possibility of utilizing the company’s owned real estate in order to raise cash to pay down debt and enhance its balance sheet.

 

 

Challenges

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In order to accomplish this, WWM evaluated and priced the sale-leaseback of four manufacturing facilities located in four cities (Dallas, Minneapolis, Kansas City, and Los Angeles).  Extensive marketing of the investment opportunity was necessary in order to procure a buyer that was willing to spend the time to learn more about the business and their turnaround plans.

 

 

Results

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WWM determined that the package was marketable, established a range of values for the package, prepared and then distributed an offering memorandum to a national roster of investors, REITs, and other potential buyers.  Three top investors were chosen as finalists, and the second highest bid was selected, due to their ability to close the transaction on time and per the original terms.  Once the transaction closed, the proceeds were used to pay down debt.  The portfolio company was sold to a strategic buyer two years following the sale-leaseback transaction, without negative impact or impairment due to lease commitments.