Summary
Regeneron Pharmaceuticals, Inc. (REGN) announced on December 30, 2016, its entry into a material definitive agreement to purchase its existing corporate headquarters. The facility, located in Tarrytown, NY, spans approximately 150 acres and includes about 1.2 million square feet of office and laboratory space, with an additional 20% leased to third-party tenants. The company has been a tenant at this location for over 25 years. The acquisition price is set at $720 million, with closing expected in the first quarter of 2017. The company plans to finance this acquisition through a new lease financing arrangement with Banc of America Leasing & Capital, LLC. This structure involves assigning the purchase rights to an affiliate of the financing provider, who will then become the legal owner. Regeneron will lease the facility back for five years, with anticipated lower rental payments than its current lease and immediate accretion. The agreement includes options for lease extension, purchase, or sale at the end of the term. While there is no guarantee of obtaining the financing on the specified terms, Regeneron has alternative financing options, including its existing credit facility, to ensure the acquisition can proceed.
Key Highlights
- 1Regeneron to purchase its current corporate headquarters for $720 million.
- 2The facility comprises approximately 150 acres and 1.2 million square feet of owned space, with additional third-party leases.
- 3Acquisition expected to close in Q1 2017.
- 4Financing plan includes a sale-leaseback structure involving Banc of America Leasing & Capital, LLC.
- 5The leaseback is expected to result in lower rental payments and be immediately accretive.
- 6Regeneron has fallback financing options if the primary financing is not secured.
- 7The company has operated from this location as a tenant for over 25 years.