How Food Processors Can Tap Into Tied-up Capital with Sale Leasebacks
October 20, 2022 – SLB Capital Advisors provided viewpoints regarding sale leasebacks in the food processing sector
- SLB Capital Advisors Partner Malik Franklin provided a review of sale leasebacks in the food processing sector with Food Dive.
- “By selling property and promptly leasing it back, food processors can get a fresh layer of cash while maintaining long-term control of their facilities, writes Malik Franklin.”
- “ . . . [F]ood processors need fresh capital, either defensively, to meet new and ongoing challenges, or proactively, to fund opportunities for growth. . . . By selling property and immediately leasing it back, food processors can realize a fresh layer of capital while maintaining long-term control of their facilities.
- “What can make a sale leaseback transaction especially attractive is the arbitrage opportunity it offers owners. In a nutshell, food processors can sell their real estate at a valuation multiple that is often greater than the business valuation multiple.”
- “Many of the challenges facing food processors at the moment, particularly labor shortages, increasing costs, and supply chain disruptions, may yet stretch on for years. Accordingly, the capital that a sale leaseback transaction provides may be important now, and well into the future. “
- Read the full article here.