$15M Industrial Sale Leaseback to Finance Corporate Carveout by PE

Background:

Ascension Advisory is proud to represent Columbia River Partners (“CRP”), the new private equity owner of SGS North America’s Powertrain Testing Operations. Ascension structured a simultaneous sale leaseback of the business unit’s two subject properties and the private equity firm used the proceeds from the sale leaseback transaction to help finance the corporate carveout from the seller, SGS.

Client Objective:

CRP was under exclusivity to acquire the US powertrain testing operations from SGS, a multi-billion dollar, Switzerland-based, public company. SGS was intent on selling the business unit’s real estate facilities along with the business operations, and wanted a partner who could provide this solution and within a quick timeframe. Aware of Ascension’s expertise in structuring sale leasebacks as acquisition financing for M&A transactions, CRP engaged Ascension to run an expedited marketing process of the 2 subject facilities in Colorado and Indiana with the goal to close alongside their business acquisition.

Solution:

The Ascension Advisory team moved quickly to run a competitive off-market process that generated multiple offers from qualified investors, including public REITs, family offices, and private investment funds. Given the quick timeline, Ascension recommended a private investor who was competitive on economics and lease terms, and who the team knew was flexible and easy to work with. The winning bidder closed on the transaction at a total purchase price of $15M with due diligence completed well in advance of the opCo closing, providing the certainty to CRP that the sale leaseback was ready to go as soon as CRP was ready to close on the M&A transaction. Both the client and the buyer were very pleased with the outcome and the parties look forward to building their relationship as tenant and landlord.