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. “
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