TULSA, Oklahoma - Educational Development Corporation (NASDAQ: EDUC), a children's book publisher, has entered into a Letter of Intent (LOI) with Blue Ledge Group to sell its Tulsa headquarters and distribution warehouse for $37.75 million. The transaction, announced today, involves the Hilti Complex at 5400-5402 South 122nd East Avenue, Tulsa, Oklahoma.
The sale, agreed upon on March 6, 2024, is part of the Company's strategy to capitalize on the property's appreciated value, which will allow the firm to settle its outstanding Term Loans and Revolving Loan under its Credit Agreement. The proceeds from the sale are expected to improve the Company's financial health by reducing borrowing costs and eliminating monthly mortgage payments.
According to Craig White, President and CEO of Educational Development Corporation, the sale will enhance shareholder value and lead to limited working capital borrowings. The Company anticipates strong cash flows as it converts excess inventory to cash in the coming years.
The Hilti Complex comprises multiple buildings with 402,000 square feet of rentable space on a 34-acre site. A third-party tenant occupies approximately 183,800 square feet under a 15-year lease, and Educational Development Corporation occupies the rest. The excess land parcel adjacent to the Hilti Complex, approximately 16.75 acres, will remain under the ownership of EDC.
Under the terms of the LOI, Blue Ledge Group has 30 days from March 6 to complete due diligence, with the closing of the Purchase Agreement slated for 45 days after this period, extendable by an additional 15 days for financing purposes. EDC will enter a Triple-Net Lease for its portion of the complex for 10 years, with an initial lease rate of $8.72 per square foot and 2% annual escalations starting in the sixth year.
Educational Development Corporation, established as a publisher of children's books, is known for owning and publishing Kane Miller Books and producing educational products through Learning Wrap-Ups and SmartLab Toys. It is also the exclusive U.S. multi-level marketing distributor of Usborne Publishing Limited children's books.
This news is based on a press release statement and reflects the Company's plans to improve its financial standing through strategic asset management.
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