Big Lots has entered into sale and leaseback agreements with affiliates of Oak Street Real Estate Capital covering the company’s distribution centers in Columbus, OH, Durant, OK, Montgomery, AL and Tremont, PA.
Plans call for the transactions to close during the retailer’s fiscal second quarter, subject to continued due diligence, final documentation and other customary closing conditions.
Big Lots stated that it expects gross proceeds from the transactions to be $725 million. Net of expenses and taxes, the company anticipates receiving net proceeds of about $550 million. It intends to use the net proceeds from the transactions to fully pay down debt on its revolving credit facility, provide additional liquidity and, when market conditions normalize, for other corporate purposes such as investments in growth initiatives and potential share repurchases.
Bruce Thorn, Big Lots president and CEO, said, “We are pleased to have reached an agreement with Oak Street for the sale and leaseback of our four company-owned distribution centers. Our board and management team regularly evaluate ways to optimize our balance sheet while maintaining a conservative capital structure. The transactions will provide the company with significant additional liquidity to navigate the current uncertain environment. In addition, when we return to more normal conditions, it will enhance the company’s ability to take other measures to drive shareholder value.”