The Dixie Group, Inc. Friday announces it has entered into a letter of intent to sell to CenterPoint Properties Trust the company’s Santa Ana, Ca. facility. The transaction is subject to entering into a definitive purchase and lease agreement.
The property consists of 10 acres with one building totaling approximately 200,000 square feet. The transaction is anticipated to close in early October. The purchase price is in excess of $40 million and is anticipated to generate an after tax gain on sale in excess of $20 million. Simultaneously, under the agreement, the company shall sign a lease for 10 years with two 5-year renewal options.
Commenting on the anticipated transaction, Daniel K. Frierson, chairman and chief executive officer, said, “We believe this transaction will strengthen our balance sheet by paying down debt, increasing our equity and substantially improving the availability under our lines of credit. We are pleased with this opportunity to work with CenterPoint Properties Trust and begin a mutually beneficial relationship. Our commitment to the Santa Ana operation is demonstrated by this long term lease. We have an excellent work force that we have developed over the years here in Orange County that continues our tradition of producing for our Fabrica Brand and its emphasis on 'Quality without Compromise'. This transaction, along with our becoming profitable in the second quarter excluding restructuring related charges, helps ensure our long term financial stability."