The Basics
Sale/Leaseback Benefits
Criteria
Custom Structuring
Financial Statement Impact
Case Study: Tire America
Case Study: Kenco Group
Next Steps
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Case Study: Tire America
Over a four year period, Cenury Equities acquired 36 locations in 10 states on a sale/leaseback basis from Tire America, a financially strong, privately owned, regional company.
This important relationship with Century Equities allowed Tire America to keep the real estate and associated long-term debt off of their balance sheet by structuring the leases as operating leases. By doing so, the transactions were relegated to disclosure in the footnotes of their audited financial statements. The sale/leaseback transactions provided Tire America with the needed capital to fuel its rapid growth.
Tire America’s “clean” balance sheet and
its rapid expansion were critical factors that led Western
Auto Supply to acquire Tire America. Subsequently, Western
Auto Supply became a member of the Sears, Roebuck & Company
family and changed the name to National Tire & Battery.
Deal Specifics
- Typical store 8,000 - 10,000 sq. ft.
- Signed 20 year net leases
- Two 5-year extension options
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