Big sale-leaseback deal for BlueLinx

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Big sale-leaseback deal for BlueLinx

By HBSDealer Staff - 02/03/2020
Building products distributor BlueLinx Holdings Inc. announced that it has completed sale-leaseback transactions of nine properties for cash proceeds of $34 million.

The transactions closed on Jan. 31 and the Marietta, Ga.-based company said the cash will be used to pay debt under the company’s term loan.

Following the repayment, the balance of the company’s term loan was approximately $85 million – well below the designated term loan principal balance of $95.3 million necessary to maintain the leverage covenant levels established in the third amendment to BlueLinx’s term loan facility.

“I am pleased to announce the closing of these sale-leaseback transactions, which generated an additional $34 million in net cash proceeds for debt repayment,” said Mitch Lewis, president and CEO of BlueLinx. “Generating value from our owned real-estate has been a key component in our deleveraging initiatives, and it is noteworthy that over the past 12 months, we have successfully executed on this aspect of our long-term strategic plan.”

BlueLinx has been employing a sale-leaseback strategy for more than a year. The latest deal is with AIC Ventures, a private investment fund manager. The distributor has entered into lease agreements for each of the properties for initial terms of 15 years, with multiple renewal options.

The facilities included in the transactions are located in Akron, Ohio; Charlotte, N.C.; Cincinnati, Ohio; Denville, N.J.; Long Island, N.Y.; Memphis, Tenn.; Pensacola, Fla.; Portland, Maine; and San Antonio, Texas.

BlueLinx also announced the amendment of its asset based revolving credit facility due October 10, 2022. The company said the amendment was made to better align advance rates with the seasonality associated with its business. No changes were made to facility size, maturity date, pricing or other material terms.

Following the term loan payment, BlueLinx estimates that its consolidated total debt under the term loan agreement will range between $455 and $460 million for purposes of its fourth quarter 2019 leverage ratio.

BlueLinx distributes building products to approximately 15,000 national, regional, and local dealers, as well as specialty distributors, national home centers, industrial, and manufactured housing customers in 40 states.


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