$11M Sale Leaseback for Operio Group Generated $5.7M Spread

Introduction: 

Ascension Advisory is proud to announce the successful completion of a strategic industrial portfolio sale leaseback transaction for Operio Group, a market leader in the nutraceutical manufacturing industry. This case study highlights the complexities of sale leaseback nuances, including working through various title issues and due diligence concerns, to achieve significant net proceeds for the client. 

Client Objective: 

Operio Group had just acquired an add-on to its business, the Elizabeth Companies. As part of its acquisition of the operating company, the Operio Group struck a purchase option for the manufacturing facilities occupied by the company, at an option price of $5.33 million. To help finance the M&A transaction, the Operio Group put in place mezzanine debt. Ascension Advisory approached the Operio Group to structure a transaction by which Operio exercised the purchase option for the real estate, and simultaneously sold the properties for a significantly higher price in a sale leaseback transaction. A sale leaseback transaction would generate substantial net proceeds to fuel future growth initiatives and de-risk the balance sheet.

Solution: 

Leveraging their expertise and industry knowledge, the Ascension Advisory team spearheaded the transaction for Operio Group. The deal team brought in a sophisticated industrial investor, and meticulously structured the transaction to accommodate the simultaneous timing of the option exercise along with the sale leaseback closing, ensuring a seamless process for the client. The team had to work through various title and property diligence concerns which posed challenges during the transaction and involved a number of unrelated third party agreements. However, the Ascension Advisory team adeptly addressed these issues, coming up with win-win solutions for all parties involved. The team implemented various strategies to alleviate concerns for the Operio Group and the sale leaseback investor and facilitate the transaction's path to closing.

The buyer was a private industrial investment fund with decades of experience who was capable of understanding and navigating the complexities of the double escrow transaction, along with the property diligence nuances. The buyer’s ability to close alongside the double escrow process streamlined the transaction timeline and ensured a successful outcome for all parties involved. 

Outcome: 

Through the tactical execution of the sale leaseback transaction, the Operio Group generated a spread of nearly $6 million in gross proceeds. This capital provided the company with enhanced financial flexibility and liquidity to pursue future growth opportunities within the nutraceutical industry and to pay down more expensive debt on the balance sheet. Despite the number of complexities to work through, the parties collaborated effectively to a successful closing at a sale price of $11 million.  

Conclusion: 

The $11 million industrial portfolio sale leaseback for Operio Group demonstrates Ascension Advisory's ability to navigate complex transactions and deliver exceptional outcomes for its clients, always putting their clients first. By leveraging their expertise and robust track record of closing complicated deals, the Ascension team successfully addressed a variety of property concerns, due diligence issues, and executed a double escrow transaction to achieve significant spread for Operio Group and an overall wonderful outcome. This case study highlights the value of having a sophisticated, experienced, and loyal advisor in your corner when structuring complicated sale leaseback transactions. 

"It was great working with Chelsea and her team. The way that she was able to handle the unique challenges faced in this transaction was impressive. I am confident that we delivered the maximum value for the sellers, the buyers and our operating entity."

Alastair Sanderson, CEO