BlueLinx completes Denver sale-leaseback deal

BlueLinx Holdings Inc. reported that it has completed a sale-leaseback transaction for its owned distribution facility in Denver, Colo. with net cash proceeds of $10.6 million.

The transaction closed on Aug. 14, according to the Marietta, Ga.-based building products distributor. Following the deal, BlueLinx has entered into a lease agreement for the property with multiple renewal options.

Proceeds were used to repay debt under the company’s term loan, which is approximately $57.8 million following the payment. 

BlueLinx said that it is no longer subject to the term loan facility’s total net leverage ratio covenant as long as the principal balance level under the facility is less than $45 million.

“I am very pleased to announce the closing of this latest sale-leaseback transaction, which generated meaningful net cash proceeds for debt repayment,” said Mitch Lewis, president and CEO of BlueLinx. “We remain in active and ongoing discussions on other opportunities to monetize our owned real estate portfolio as we continue to aggressively pursue our deleveraging strategy.”

Earlier this month, BlueLinx reported that second quarter net sales dipped to $699 million compared to sales of $706 million in the second quarter of 2019. But the company posted a net income of $7 million, rising nearly 17% from a net income of $6 million for the same period last year.

BlueLinx serves about 15,000 dealers and customers in 40 states. The company carries more than 50,000 branded and private-label SKUs.