A privately held manufacturer was in the process of acquiring another privately held company located out of state. The acquisition included the purchase of real property assets. During the acquisition’s due diligence period, it was discovered that the real property was environmentally contaminated. The acquirer was concerned about purchasing a contaminated site and renegotiated the terms of the acquisition to exclude the real property. The closing date was approaching and alternative locations in which to operate the acquired business had not yet been identified. The CEO, Board of Directors, and outside legal counsel engaged Allegro to assess the real estate requirements and to identify and secure a new manufacturing facility.
The business acquisition was progressing when Allegro was engaged, resulting in an aggressive time frame to identify and occupy a new location. Allegro facilitated the site selection process and engaged a local broker to assist with the identification of alternative locations in a rural location with limited product available. Allegro structured the transaction to meet the client’s requirements, which included unique build-out specifications and the flexibility to stay long-term (through lease renewal options and a purchase option) or relocate again after testing the new location. Allegro also guided the process to identify and attain economic incentives.
The client, since relocating, has retained all of its critical staff members, occupies a more efficient facility and site, is better located for accessibility to its customers and suppliers, and has secured tax incentives to help allay the business acquisition and relocation costs. Three years after the lease transaction was completed, the general economic and real estate market conditions had worsened. With the purchase option notice period approaching, Allegro successfully renegotiated a lower purchase price and worked with the client’s accountant and attorney to facilitate the closing.
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