BlueLinx Holdings, a distributor of building and industrial products, has completed sale-leaseback transactions resulting in aggregate net cash proceeds of $27.2 million. The company used the funds from the sale-leasebacks to repay debts under its term loan.
“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,” president and CEO Mitch Lewis said in a prepared statement.
Facilities located in Kansas City, Mo., Nashville, Tenn., Richmond, Va., and St. Louis, Mo., were involved in the sale-leaseback transactions. As part of the transactions, the distributor entered into lease agreements for each of the four properties for initial terms of 18 years. BlueLinx said the length of the lease agreements represent long-term commitments to each of the four local markets.
"We remain in active and ongoing discussions with other sale-leaseback and outright sale opportunities, and believe these efforts should generate additional meaningful debt reduction in the first quarter,” Lewis said.
In addition to completing the sale-leaseback transactions, Marietta, Ga.-based BlueLinx also updated the agreement of its term loan facility. The amendment gives the distributor until March 27 to satisfy the designated term loan principal of $95.3 million to maintain the leverage covenant levels established in the third amendment to the term loan facility.
The amount of additional principal repayment to reach that level was reduced to approximately $23.7 million following the company’s most recent loan and can be satisfied with proceeds from real estate transactions and asset sales. According to the company, the amendment provides more flexibility and time to maximize sale-proceeds and obtain better cap rates for future sale-leaseback and outright sale opportunities.
BlueLinx Holdings has a distribution footprint serving 40 states and the company distributes its range of structural and specialty products to approximately 15,00 customers across the U.S.