The Dixie Group, Inc. reported the sale of its facility in Adairsville, Ga., and approximately 17 acres of surrounding property to Adairsville, Ga, LLC, an affiliate of Cannon Commercial, Inc., for a sale price of approximately $16.3 million. The sale resulted in a gain of over $8 million and a reduction of the company's existing debt of approximately $16 million.
Concurrent with the sale of the property, the Dixie Group and Adairsville, Ga, LLC entered into a 10-year lease agreement, whereby the Dixie Group will lease back the property at an annual rental rate of $1.5 million over the first five years and $1.6 million for the remaining five years. Under the lease, the Dixie Group has two consecutive options to extend the term of the lease by five years for each such option.
Simultaneously with the sale, the Dixie Group paid down its existing loan with RGA in the amount of $10.4 million and its credit facility by approximately $5 million.