Summary
Advanced Micro Devices, Inc. (AMD) announced the sale of its Lone Star Campus in Austin, Texas, for approximately $164 million in cash to 7171 Southwest Parkway Holdings, LP. This transaction is structured as a sale-leaseback, where AMD will lease back a significant portion of the property post-sale. The company expects to record a special charge of approximately $50 million related to the sale, which will impact its first quarter of fiscal 2013 results. While the immediate financial impact includes a charge, this move could provide AMD with much-needed cash infusion and potentially optimize its real estate footprint.
Key Highlights
- 1AMD has agreed to sell its Lone Star Campus for approximately $164 million.
- 2The transaction is structured as a sale and subsequent leaseback of a substantial portion of the property.
- 3The company anticipates a special charge of approximately $50 million due to the sale.
- 4The sale is expected to close on March 26, 2013.
- 5AMD will enter into a sublease agreement for 812,350 rentable square feet, with estimated net rent of $10.3 million in 2013 and $10.8 million in 2014.
- 6The sublease includes provisions for early expiration of certain spaces and a 10-year renewal option for the company.
- 7The transaction aims to generate cash while allowing AMD to continue operations at the campus through the leaseback arrangement.