FranklinCovey Announces Agreement to Sell and Lease-Back Headquarters
SALT LAKE CITY - FranklinCovey, a leading consultant firm, announced today that it has entered into an agreement to sell and lease-back the real estate and buildings at its corporate headquarters in Salt Lake City, Utah for $34.3 million. In connection with the sale, FranklinCovey will enter into a 20-year master lease agreement with the purchaser, a private investment group. Having six five-year options to renew the master lease agreement, FranklinCovey could therefore maintain its principal headquarters and operations at the current location for the next 50 years.
The Company expects that if the sale is completed, its net proceeds after transaction costs will be approximately $32 million. If the closing occurs, net proceeds will be available for general corporate purposes. If shareholders approve the Company's proposed recapitalization plan at the annual meeting on March 4, 2005, all or a portion of the proceeds may, subject to the discretion of the Board of Directors, be used to exercise the Company's contractual rights to retire a portion of its outstanding preferred stock provided for in that plan. Use of the funds will depend on many factors including the anticipated ability of the Company's operations to generate positive cash flow, the anticipated need for future capital expenditures, and the existence of perceived opportunities for future growth of the business of the Company through expansion or acquisition. Changes in any of these factors could materially influence the decision of the Board of Directors with respect to the use of the funds.
However, the purchaser's obligation to close is subject to a 60-day due diligence review, obtaining acceptable financing, confirmation of title and survey information and other customary closing conditions. FranklinCovey's closing obligations are subject to Board approval and other conditions.
FranklinCovey is a leading learning and performance services firm assisting professionals and organizations in measurably increasing their effectiveness in productivity, leadership, communication and sales. Clients include 91 of the Fortune 100, more than three-quarters of the Fortune 500, thousands of small and mid-sized businesses, as well as government entities. Organizations and professionals access FranklinCovey services and products through consulting services, licensed client facilitators, one-on-one coaching, public workshops, catalogs, more than 130 retail stores, and http://www.franklincovey.com.
Lease and Rental Agreements