NEW YORK, NY – July 17, 2002 – Investment banking firm W. P. Carey & Co. LLC (NYSE: WPC) announced today that it has acquired and leased-back the corporate headquarters and two key distribution facilities of Minneapolis, MN-based Katun Corporation for approximately $35.6 million. The transaction was completed in conjunction with the leveraged buyout (LBO) of Katun Corporation by Banc of America Capital Investors (BACI) and Chicago-based private equity firm Svoboda, Collins LLC.
In conjunction with the LBO of Katun Corporation, BACI and Svoboda, Collins will merge Katun Corporation with Madison, WI-based PARTS NOW! LLC, a portfolio company of the two firms. Katun Corporation is the world's leading alternate supplier of imaging supplies, photoreceptors and parts for the photocopier market, while PARTS NOW! is the world's leading distributor and remanufacturer of new and refurbished computer printer parts.
Under the terms of the sale-leaseback agreement, the facilities will be leased under two 20-year bond-type net leases. The properties, which total approximately 467,000 square feet, consist of Katun Corporation's corporate headquarters in Bloomington, MN, as well as Katun's main U.S. and European distribution facilities located in Davenport, IA and Gorinchem, The Netherlands. The facilities were purchased by Corporate Property Associates 14 Incorporated (CPA®:14), a member of the $3.5 billion W. P. Carey Group of non-traded real estate investment trusts (REITs).
This transaction is part of W. P. Carey's record second quarter of acquisition deals during which the firm completed more than $168 million worth of acquisitions, as compared to $61 during the second quarter of 2001. This follows W. P. Carey's strong first quarter during which the firm completed more than $115 million worth of acquisitions, as compared to $44 million during the first quarter of 2001. In 2002, the firm has completed more than $335 million worth of acquisitions.
"This transaction is just another example of the many ways that sale-leaseback financing can be used by companies – in this case to fund the successful LBO of Katun Corporation," said Anne R. Coolidge, Executive Director at W. P. Carey. "This financing will enable Banc of America Capital Investors and Svoboda, Collins to monetize the real estate assets of Katun Corporation. Even with international properties involved, W. P. Carey is able to customize the transaction to meet the needs of the private equity firms."
Sheryl E. Bartol, a Partner at Banc of America Capital Investors (BACI), said, "The sale leaseback financing was an important part of our transaction, enabling us to further leverage our equity. W. P. Carey's ability to underwrite the full transaction, including the international facility differentiated them in the market."
Katun Corporation is one of the world's leading aftermarket distributor of imaging supplies, photoreceptors and parts, as well as a leading manufacturer of fuser rollers and other select products for the business equipment industry. Katun manufactures and sources parts and supplies for over 19,000 customers in more than 170 countries.
PARTS NOW! is one of the largest computer printer parts distributors in the world, carrying the most extensive inventory in the industry. It is one of the largest printer parts reseller for Hewlett-Packard, Lexmark and Canon U.S.A. Inc.
BACI invests private equity and mezzanine capital for corporate acquisitions, recapitalizations and growth financings. According to BACI, since its founding in 1989, it has invested more than $1.5 billion in more than 160 companies. Svoboda, Collins LLC is a $150 million private equity fund, established in January 1998, to identify, invest in and build service and distribution companies.
CPA®:14 invests in single-tenant commercial properties which are typically purchased under a long-term, triple-net lease in which the tenant is responsible for maintaining the premises, insuring the buildings and paying real estate taxes. As of June 30, 2002, CPA®:14's diversified portfolio contained more than 130 properties net-leased to more than 60 tenants throughout the United States and Europe totaling more than 20 million square feet of space.
Founded in 1973, W. P. Carey & Co. specializes in corporate real estate financing through the corporate net lease, or sale-leaseback structure. The firm and its affiliates continue to be the leading lessors of net leased corporate real estate in the United States. As the largest publicly traded limited liability company in the world, the company owns and/or manages more than 450 commercial and industrial properties throughout the United States and Europe comprised of more than 60 million square feet of space.
This press release contains forward-looking statements within the meaning of the Federal securities laws. A number of factors could cause the company's actual results, performance or achievement to differ materially from those anticipated. Among those risks, trends and uncertainties are the general economic climate; the supply of and demand for office and industrial properties; interest rate levels; the availability of financing; and other risks associated with the acquisition and ownership of properties, including risks that the tenants will not pay rent, or that costs may be greater than anticipated. For further information on factors that could impact the company, reference is made to the company's filings with the Securities and Exchange Commission.
