NEW YORK, NEW YORK – July 16, 2003 – Investment firm W. P. Carey & Co. LLC (NYSE: WPC) today announced that it acquired the National Distribution Center of Lillian Vernon Corporation for approximately $37 million. The sale-leaseback transaction was an instrumental part of the acquisition financing used by Ripplewood Holdings LLC, a leading private equity investor, and ZelnickMedia, a New York-based media company, to purchase Lillian Vernon, headquartered in Rye, New York, for $60.5 million.
The 827,000 square foot facility, located in Virginia Beach, Virginia, serves as Lillian Vernon’s primary distribution and call center. It will be leased under a 20-year triple net lease with two, ten-year renewal options. The facility was purchased on behalf of Corporate Property Associates 15 Incorporated (CPA®:15) a member of the $5 billion W. P. Carey Group of income generating real estate investment trusts (REITs).
“This transaction is a good example of how sale-leaseback financing can be used by companies to raise capital,” said Benjamin P. Harris, Executive Director of W. P. Carey. “In this case, Ripplewood used sale leaseback proceeds to fund the buyout of Lillian Vernon. This transaction helped Ripplewood convert a brick and mortar asset into working capital. We are pleased to work with the talented group at Ripplewood and are proud to add this facility to CPA®:15’s growing portfolio of properties.”
“We are pleased by the support we received from W. P. Carey,” said Strauss Zelnick, Chairman and Chief Executive Officer of Lillian Vernon Corporation. “Their expertise and capabilities were essential to completing our recent acquisition.”
This latest acquisition adds to W. P. Carey's growing managed portfolio of properties in Virginia, which consist of approximately 580,000 square feet. The properties, owned by W. P. Carey & Co. LLC and its affiliates, include warehouse, distribution, office and retail facilities leased to Applied Power, Inc., Best Buy Stores, L.P., Builders FirstSource, Inc., Childtime Childcare, Inc., Consolidated Theaters, Inc,. McLane Foodservice, Penn Virginia Coal Company, Rochester Button Company and The Roof Center, Inc.
Lillian Vernon Corporation is a 52-year old national catalog and online retailer that markets gift, housewares, gardening, Christmas, and children's products. The Company is one of the largest specialty catalogs in the United States. Lillian Vernon and its subsidiaries publish seven catalog titles: Lillian Vernon, Lilly's Kids, Christmas Memories, Favorites, Personalized Gifts, Rue de France and a Sale catalog. The Company also sells its products in the business-to-business and outlet store markets.
Ripplewood manages approximately $4 billion of committed capital through four institutional private equity funds, focusing primarily on investments in the U.S. and Japan. Ripplewood is a pioneer of the "Industrial Partner" investment philosophy, in which the firm forms partnerships with world-class operating executives to acquire businesses in targeted industries and pursue pre-defined strategies to enhance the value of these businesses.
ZelnickMedia, is a partnership of experienced media executives which owns interests in, advises, and manages an array of media enterprises in recorded music, magazine publishing, CD manufacturing, online games, and media-related software, both in the U.S. and Asia. ZelnickMedia has worked closely with Ripplewood on various investment opportunities since the firm was founded by Strauss Zelnick two years ago.
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.
