Realty Income says it will pay between $45 million and $50 million for the Midas-owned shops. The muffler and brake retailer expects to net as much as $42 million in the deal, which is expected to close in the second quarter and is contingent on appraisals of the properties in the package. The proceeds will be used to pay down Midas' $150-million debt.
"By monetizing a portion of our valuable real estate portfolio, we are able to reduce our bank debt, a key priority for Midas in 2002," says chairman and chief executive officer Wendel Province, adding the company can earn a higher rate of return investing in its business than being a property owner.
"We have no current plans to sell more real estate," Midas chief financial officer William Guzik says in an earnings conference call. "However, as we continue to evaluate our capital requirements, we will determine how our real estate holdings fit into those needs."
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