Big Lots has completed its previously announced sale and leaseback transactions with affiliates of Oak Street Real Estate Capital relating to its four company-owned distribution centers. Gross proceeds from the transactions were $725 million and net proceeds, after expenses and taxes, are expected to be approximately $550 million.
Prior to closing, the company used $120 million of cash on hand to pay down all of its outstanding borrowings on its revolving credit facility. The company intends to use the net proceeds from the transactions to provide additional liquidity and, as market conditions normalize, for other corporate purposes, including potential share repurchases pursuant to future authorizations from the company’s board of directors.
The transactions involve the company’s distribution centers in Columbus, OH, Durant, OK, Montgomery, AL, and Tremont, PA. Initial lease terms are fifteen years for the Columbus, OH, and Montgomery, AL, facilities, and twenty years for the Durant, OK, and Tremont, PA facilities.
Bruce Thorn, president and CEO of Big Lots, said, “We are pleased to have closed the transactions with Oak Street. On top of our recent positive business trends, the proceeds from the transactions provide us with a strong liquidity position. As we continue to see a return to a more normal operating environment, we expect to use this liquidity to take additional actions to drive shareholder value, including share repurchases and high-return growth initiatives, while remaining highly focused on growing free cash flow from ongoing operations.”