BlueLinx closes four sale-leaseback deals

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BlueLinx closes four sale-leaseback deals

By HBSDealer Staff - 01/02/2020
BlueLinx Holdings Inc., the building and industrial products distributor, reported that it has completed sales-leaseback transactions that have resulted in net cash proceeds of $27.2 million.

The funds, from transactions that closed on Dec. 31, will be used to pay down the company’s term loan.

Involved in the transactions are locations in Kansas City and St. Louis, Mo.; Nashville, Tenn.; and Richmond, Va. The transactions include BlueLinx entering into 18-year lease agreements for each of the properties.

The Marietta, Ga.-based distributor said the lease agreements demonstrate the company’s commitment to each of the local markets.

“I am very pleased to announce the closing of these latest sale-leaseback transactions, which generated $27.2 million in net cash proceeds for debt repayment.  As we have consistently stated, deleveraging is a priority, and a key path to achieving this objective has been through the successful monetization of our owned real estate portfolio,” said Mitch Lewis, president and CEO of BlueLinx.

According to Lewis, BlueLinx remains active in ongoing discussions for additional sales-leaseback and “outright sale” opportunities. Lewis noted that the “efforts should generate additional meaningful debt reduction in the first quarter.”

In addition to the sale-leaseback transactions, BlueLinx has entered into an amendment to its term loan facility that gives the company until March 27 to satisfy the designated term loan principal balance of $95.3 million to maintain the leverage covenant levels established in the third amendment to the facility.

Prior to this series of transactions, BlueLinx reported that it held a real estate portfolio worth about $100 million.

The amount of additional principal repayment to reach that level was reduced to approximately $23.7 million following the company’s most recent loan.

BlueLinx said the amendment provides the company with additional flexibility and time to maximize sale proceeds and obtain better cap rates for the other sale-leaseback and outright sale opportunities that it is currently pursuing.

As of Sept. 28, 2019, the company’s term loan balance was $147.2 million, the average balance of its revolving credit facility was $357.9 million, its equipment finance lease liability was $34.4 million, and its unrestricted cash was $10 million.

Liabilities related to sale-leaseback transactions are excluded from the calculation.  Following the term loan repayment, the company’s term loan balance is approximately $119 million.

BlueLinx handles more than 50,000 branded and private-label SKUs while servicing customers in 40 states.


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