Scholastic Corporation (NASDAQ: SCHL), the children’s publishing, education and media company, has entered into sale-leaseback transactions for its New York City headquarters and its primary distribution facility in Jefferson City, Missouri, which together are expected to generate estimated net proceeds of $401 million.
Under the terms of the transactions, Scholastic will sell New York City headquarters to a subsidiary of Empire State Realty Trust, Inc. (NYSE: ESRT) for gross proceeds of $386 million in cash. The Jefferson City facility will be sold to funds managed by affiliates of Fortress Investment Group for gross proceeds of $95 million in cash. Upon closing of each of these transactions, Scholastic will enact long-term leases to continue operations at both locations, while substantially reducing its presence within its headquarters building.
Newmark Group Inc. (NASDAQ: NMRK) served as exclusive advisor to Scholastic Corporation on both sale-leaseback transactions while Hogan Lovells served as legal counsel and Gagnier Communications served as a strategic communications advisor on the transactions.
“Today’s announcement reflects meaningful momentum for Scholastic as we unlock the value of our owned real estate and focus on accelerating long-term, profitable growth and shareholder value creation,” said Peter Warwick, president and CEO of Scholastic. “Following highly competitive processes, these transactions maximize value from our most significant non-operating assets, while securing long-term use of strategic real estate key to our operations, now rightsized for our business needs. With a stronger balance sheet, we will be better positioned to continue investing in the extraordinary potential of our brand, content and mission, while returning capital to shareholders.”
Photo of Scholastic’s New York City headquarters courtesy of SoHo Broadway Initiative
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