Bob Evans Farms Completes Sale-Leaseback of 143 Restaurant Properties for $197 Million
April 18 2016 - 8:30AM
Bob Evans Farms, Inc. (NASDAQ:BOBE) (“Company”) today announced
that on April 14, 2016, it completed the previously announced
sale-leaseback transactions with a subsidiary of National Retail
Properties, Inc. (“NNN”), and Mesirow Realty Sale-Leaseback, Inc.,
(“Mesirow”). The transactions are summarized as follows:
- the sale for a purchase price of $160.8 million by Bob Evans
Restaurants to NNN of a portfolio of 117 Bob Evans Restaurant
properties, and
- the sale for a purchase price of $36.4 million by Bob Evans
Restaurants to Mesirow of a portfolio of 26 Bob Evans Restaurant
properties.
As part of the transactions, Bob Evans Restaurants entered into
absolute net master leases with NNN and with Mesirow pursuant to
which Bob Evans Restaurants will lease the locations for an initial
term of 20 years, with five renewal options of five years
each. The Company and certain of its subsidiaries have agreed
to provide payment and performance guaranties to NNN and
Mesirow.
Chief Administrative and Chief Financial Officer Mark Hood said,
“The sale-leaseback transactions provided the Company with net
proceeds (after tax- and transaction-related costs) of
approximately $164 million, which we expect to use to pay down debt
under the Company’s credit agreement, repurchase Company shares,
and for other corporate purposes, while maintaining prudent
leverage.”
The transactions, which will be recorded in the Company’s fiscal
2016 fourth-quarter results, resulted in an estimated pre-tax gain
of $57 million on certain of the properties which will be amortized
over the initial term of the lease and an estimated pre-tax loss of
$9 million on other of the properties that will be recorded in the
fourth quarter. Additionally, rent expense (net of the gain
amortization) of approximately $11 million is expected to be
incurred during fiscal year 2017. Depreciation expense of
approximately $9 million related to the properties sold will no
longer impact financial results beginning in fiscal year 2017.
Franchise Capital Advisors along with Quantum Global LLC served
as lead arrangers while J.P. Morgan Chase & Co. served as
financial advisor to the Company on this transaction.
Information concerning this event was filed by the Company today
with the Securities and Exchange Commission and can be obtained at
www.sec.gov.
Safe Harbor Statement under the Private Securities
Litigation Reform Act of 1995 Certain statements in this
news release that are not historical facts are forward-looking
statements. Forward-looking statements involve various important
assumptions, risks and uncertainties. Actual results may differ
materially from those predicted by the forward-looking statements
because of various factors and possible events. We discuss these
factors and events, along with certain other risks, uncertainties
and assumptions, under the heading “Risk Factors” in Item 1A of our
Annual Report on Form 10-K for the fiscal year ended April 24,
2015, and in our other filings with the Securities and Exchange
Commission. We note these factors for investors as contemplated by
the Private Securities Litigation Reform Act of 1995. Predicting or
identifying all such risk factors is impossible. Consequently,
investors should not consider any such list to be a complete set of
all potential risks and uncertainties. Any strategic
transaction with respect to our restaurant real estate remains
subject to closing conditions and there can be no assurance if such
transaction will be consummated. Forward-looking statements
speak only as of the date on which they are made, and we undertake
no obligation to update any forward-looking statement to reflect
circumstances or events that occur after the date of the statement
to reflect unanticipated events. All subsequent written and oral
forward-looking statements attributable to us or any person acting
on behalf of the Company are qualified by the cautionary statements
in this section.
About Bob Evans Farms, Inc.Bob Evans Farms,
Inc. owns and operates full-service restaurants under the Bob Evans
Restaurants brand name. At the end of the third fiscal
quarter (January 22, 2016), Bob Evans Restaurants owned and
operated 548 family restaurants in 18 states, primarily in the
Midwest, mid-Atlantic and Southeast regions of the United States.
Bob Evans Farms, Inc., through its BEF Foods segment, is also a
leading producer and distributor of refrigerated side dishes, pork
sausage and a variety of refrigerated and frozen convenience food
items under the Bob Evans and Owens brand names. For more
information about Bob Evans Farms, Inc., visit
www.bobevans.com.
About Mesirow Realty Sale-Leaseback,
Inc.Mesirow Realty Sale-Leaseback, Inc. is the net-lease
real estate investment arm of Mesirow Financial, a highly
respected, Chicago based privately-held investment bank and capital
management firm founded in 1937.
BOBE-G
Contact:
Scott C. Taggart
Vice President, Investor Relations
(614) 492-4954
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