Sale Leasebacks can Be a Strategic Tool for Processors
April 13, 2022 – SLB Capital Advisors, having been party to sale leaseback transactions across the plastics supply chain, shared perspectives on the role the sale leaseback can play for plastics manufacturing companies with Plastics Machinery & Manufacturing
- SLB Capital Advisors has been party to sale leaseback transactions across the plastics supply chain — from resin manufacturers to blow molding to extrusion to manufacturers of molding equipment. Investors and operators alike recognize the value in plastics manufacturing, but fewer are aware of how to access and capitalize on this value through sale leaseback transactions.
- Sale leasebacks can be an effective capital allocation tool for plastics manufacturers to consider. A sale leaseback is effectively a simultaneous sale of an underlying property and a leaseback to the operating business. The business becomes the tenant and continues its responsibility for expenses as if it is still owned the property.
- The simultaneous sale and leaseback of a facility to an institutional investor can unlock equity and provide the ability to repurpose that capital for other uses more pertinent to the business. The transaction is surprisingly agile, and while real estate fundamentals play a role, the key drivers of value are the credit of the tenant and the lease structure itself.
- Read the full article here.