Dive Brief:
- Covenant Logistics will sell a California terminal for $44 million in cash after an earlier buyer walked away from a similar deal earlier this summer, the company reported in an Aug. 17 securities filing.
- The unnamed buyer has paid a $2 million nonrefundable deposit, according to the 8-K report. The sale is slated to close by the end of September.
- The new deal is less valuable for Covenant than a sale another buyer abandoned in June. Covenant expects a pretax gain of about $37.5 million in the recent deal — lower than the estimated $45 million it expected in the canceled sale.
Dive Insight:
Real estate deals are providing companies with sizable influxes of cash and opening up possibilities for repurposed resources. TFI International disclosed in a Q2 report that it sold an underutilized terminal in California. Heartland Express sold a fleet maintenance facility in May and began leasing it back.
Previously, Covenant tried to sell a California terminal for $45 million earlier this year, but the deal failed. As with the canceled sale, Covenant expects to lower operating expenses by about $500,000 annually, and the carrier said it will move personnel and equipment from the California terminal to other locations “with no disruption in service.”
While Covenant said it was negotiating with other potential buyers when the June terminal sale fell through, the filing did not specify whether the same terminal was the subject of the August sale. The company did not respond to requests for comment from Transport Dive.
