$10 Million Sale Leaseback to Finance M&A

Ascension Advisory successfully completed a sale leaseback transaction on behalf of a private equity client and their platform company, a leader in the foodservice equipment and supply solution industry. The sale leaseback served as acquisition financing for the platform's acquisition of a key add-on in the midwestern United States. The acquisition came with a portfolio of four locations located in Indiana and Michigan, totaling nearly 100,000 square feet on 7 acres of land.

Client Objective:

The acquisition of the add-on provided geographic expansion into the midwestern U.S. markets, further establishing the platform company's national reach and enhancing their market position. However, the seller also included the company's four locations and the owned real estate as part of the transaction. As part of the client's overall strategy and financing structure, the private equity firm did not want to buy the real estate itself, and therefore the platform company aimed to execute the sale leaseback of the target simultaneous with the M&A transaction. In order to ensure certainty of closing, they engaged the Ascension team to run a sale leaseback process, as Ascension had run prior successful sale leasebacks on behalf of the platform company for various other add-ons that included a real estate component in the past. 

Solution:

Ascension Advisory leveraged their robust network of buyers to run a competitive investor outreach process, collecting multiple offers for the sale leaseback. The team selected a buyer experienced in the sale leaseback space, with deep knowledge of the tenant’s industry, and who offered aggressive terms. The buyer worked closely with Ascension and the private equity firm, navigating various delays and challenges that arose throughout the M&A transaction. Through meticulous coordination and collaboration, the transaction closed successfully within the timeline requested by the seller. All parties were pleased with the successful outcome.

Conclusion:

By leveraging Ascension Advisory's expertise, wide buyer network, and extensive experience in structuring sale leasebacks associated with M&A transactions, the client was able to further its expansion without tying up capital for the real estate component of the transaction. This allowed the private equity firm and its platform company to optimize the use of their resources while Ascension navigated the sale leaseback timeline to align perfectly with the business transaction.