Companies consider sale leasebacks for a wide range of reasons.

There is often an underlying arbitrage to be captured between the business EBITDA multiple and the effective real estate multiple

Average sale leaseback cap rates imply multiples of 12x – 16x In cases where a company’s EBITDA multiple is lower than the real estate multiple, value can be created for the owner by executing a sale leaseback.

Some of the many other sale leaseback drivers are listed below:

General Strategic & Financial Drivers: Focus on Core Competency Redeploy Capital for Internal Growth Initiatives Improve Blended Cost of Capital Balance Sheet Management Transfer/Mitigate Residual Risk Managing Core Constituents – Shareholders, Analysts
M&A-Related Factors:
Preparing for a Business Sale Capitalize on Value Arbitrage Buy Down the Equity Multiple Acquisition Funding Maximize Aggregate Valuation in an M&A Context Gain Advantage Relative to Other Company Bidders That are Not Factoring in an SLB