29 September 2022
CVD Equipment to sell and lease back premises for $28.5m
CVD Equipment Corp (a designer and maker of chemical vapor deposition, gas control and other equipment and process solutions for developing and manufacturing materials and coatings) has entered into an agreement to sell and lease back its Central Islip, New York facility from the prospective purchasers.
On 22 September, the firm entered into an agreement for the sale of the premises (consisting of land and building) for $28.5m (subject to the completion of due diligence by the purchaser within 30 business days, during which time they have the right to cancel the purchase agreement).
Upon the closing of the sale, CVD Equipment will enter into an agreement to lease back the premises from the purchaser. The lease will have an initial term of ten years with two renewal terms of five years each, exercisable at CVD Equipment’s option. The annual fixed rent will be $1,548,000 for the first year of the initial ten-year term and increase by 3% each year thereafter. The lease will be ‘triple net’, and CVD Equipment will continue to be responsible for costs, expenses and obligations relating to the operation of the premises.
The net cash proceeds received by CVD Equipment is expected to exceed $20m after taxes, expenses and fees (subject to the transaction closing and finalization of the firm’s tax obligations associated with the sale). The net cash proceeds will be used to strengthen the firm’s balance sheet and to fund growth opportunities.