Dixie Group Strengthens Balance Sheet with Sale of Santa Ana Facility
Dalton, GA, August 9, 2019-The Dixie Group has entered into an agreement to sell to its Fabrica facility in Santa Ana California and lease it back from CenterPoint Properties Trust.
The property consists of ten acres with one building totaling approximately 200,000 square feet. The transaction is anticipated to close in early October 2019. The purchase price is in excess of $40 million dollars and is anticipated to generate an after tax gain on sale in excess of $20 million. Simultaneously, under the agreement, the company will sign a lease for ten years with two five-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. Our commitment to the Santa Ana operation is demonstrated by this initial ten year 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,” Frierson concluded.
Dixie acquired this property as part of the Fabrica acquistion in 2000. At the time, it was built as a joint venture between three carpet mills: Fabrica, Camelot and Monterey. As the other mills moved out, Fabrica streamlined its operation in this single facility.