$9M Simultaneous Sale Leaseback and M&A Transaction Closing

Introduction:

Ascension Advisory is pleased to announce the successful completion of a simultaneous sale leaseback and M&A transaction on behalf of a repeat private equity client within the food service equipment and supplies industry. The sale leaseback totaled just under $9 million. This case study illustrates the intricacies of executing a sale leaseback and an M&A deal concurrently, where the sale leaseback formed the majority of the capital required to complete the acquisition.

Client Objective:

The private equity firm, a repeat owner of a leading platform within the food service equipment and supplies industry, sought to leverage a target’s owned real estate assets in order to serve as acquisition financing for their add-on transaction. The primary objective was to optimize the financial structure of the portfolio company and facilitate its growth trajectory through applying the real estate proceeds towards the acquisition capital stack.

Solution:

Recognizing the complexity of executing both transactions simultaneously, Ascension Advisory mobilized its experienced deal team to orchestrate a seamless and efficient sale leaseback process. The deal team, intimately familiar with the client's objectives and industry dynamics, collaborated closely with legal counsel and third party advisors to navigate the intricacies of the dual transaction structure to a successful outcome.

Leveraging its network and expertise, Ascension Advisory facilitated negotiations with prospective buyers to secure favorable terms that aligned with the client's acquisition financing goals. Ultimately, a sophisticated buyer experienced within the asset class won the bid due to the economics and flexibility of their offer and their ability to close alongside the M&A transaction.  

Outcome:

The simultaneous sale leaseback and M&A transaction yielded significant benefits for the private equity client and its portfolio company. By unlocking capital through the sale leaseback, the client bolstered its liquidity position and reduced the required leverage to complete the acquisition, enhancing the portfolio company's balance sheet and integrating a strategic add-on to the platform business.

Moreover, the M&A transaction enabled the portfolio company to expand its market presence and product offerings, positioning it for accelerated growth in the competitive food service equipment industry. The strategic use of sale leaseback funds to capitalize the deal yielded a nice financial outcome for the private equity investor as well.

Conclusion:

The successful execution of the concurrent sale leaseback and M&A transactions underscores Ascension Advisory's ability to deliver tailored, flexible solutions that meet the unique needs of its private equity clients. By leveraging its expertise and collaborative approach, Ascension Advisory orchestrated an expedited process that unlocked value and meaningful returns for the private equity firm and its portfolio company in the food service equipment and supplies industry. This case study exemplifies the many benefits of integrating real estate optimization tools with M&A activities to maximize value creation for private equity firms and their investments.