Douglas Dynamics Strikes $50M Sale-Leaseback on 7 Properties

Douglas Dynamics has struck a $50 million deal on a sale-leaseback on seven of the company’s facilities to shore up its balance sheets.

Under the agreement, the commercial truck attachments firm will have multiple options. The initial lease is for 15 years, but it can opt for renewal with two separate 10-year exercises.

While the properties were not specified by Douglas, they are located in the following cities and states: Huntley, Illinois, Manchester, Iowa, Rockland, Maine, Madison Heights, Michigan, and Milwaukee, Wisconsin.

The seven facilities take up roughly 780,000 square feet of upfitting and manufacturing space. While the properties are collectively valued at $64.2 million, the Milwaukee and New York-based firm anticipates receiving about $50 million from the sale. Douglas plans on using the proceeds to pay off debt and other corporate purposes. And while it’s looking to get capital flexibility, the firm said in a statement that the leased-back facilities represent ”critical elements” of the company and anticipates operating them for “many years to come.”

Douglas completed the deal with TPG Angelo Gordon, which has $229 billion worth of assets under management.

“These long-term lease agreements also reinforce our commitment to the communities in which we have operated for decades,” Sarah Lauber, executive vice president and chief financial officer of Douglas Dynamics, said.

“By partnering with a respected platform like TPG Angelo Gordon to leverage our real estate assets, we can optimize our balance sheet and better position ourselves for future investments in the business.”

The move by TPG comes as the management firm and its joint venture partner, Triten Real Estate Partners, are seeking to acquire more than $1 billion in industrial outdoor storage (IOS) assets.

As of June 30, Douglas reported long-term debt minus the current portion of more than $173 million, according to the company’s second-quarter financial report.