#United States #New York City #Sale-Leaseback #Scholastic Corporation #share repurchases

Scholastic's Strategic Sales: A Move Towards Growth

In a remarkable shift aimed at bolstering its financial foundation, Scholastic Corporation has successfully concluded its sale-leaseback transactions involving its headquarters in New York City and its distribution center located in Jefferson City, Missouri. This strategic move has generated a total of $481 million, with a projected net profit of $401 million following taxes and transaction-related expenses. These proceeds are set to be instrumental in fulfilling the company’s capital allocation strategies, including share repurchases.

A Key Milestone for Scholastic

Iole Lucchese, Chair of the Board of Directors at Scholastic, expressed confidence in this decision, remarking that it signifies a disciplined strategic oversight from the Board. The conversion of these non-operational assets into cash reserves not only demonstrates prudent capital allocation but also establishes Scholastic's pathway for enhancing shareholder value. Lucchese stated, "Unlocking value from non-operating assets in this manner positions Scholastic to accelerate its commitment to sustained value creation for shareholders, driving long-term growth and returning capital."

The President and CEO of Scholastic, Peter Warwick, hailed this as a critical stepping stone for the corporation. He indicated that the resource influx from these transactions would significantly boost liquidity, thereby enabling the business to further its capital-focused initiatives while concurrently optimizing operational efficiencies. Warwick noted, "These transactions mark an important milestone for Scholastic, both generating significant liquidity and reducing our operating footprint."

Details of the Completed Transactions

The company has sold its prominent site at 555-557 Broadway to a subsidiary of Empire State Realty Trust, Inc., while the Jefferson City distribution center was acquired by funds managed by affiliates of Fortress Investment Group. Scholastic had previously announced these transactions, highlighting their importance in terms of scope and impact.

The execution of these sales is expected to strengthen the operational framework of Scholastic. By divesting these properties, Scholastic can utilize the capital generated to focus on core business functions, while lessening its operational overhead.

Financial Advisors and Support

In ensuring the transactions went smoothly, Scholastic enlisted the expertise of various advisory firms. Newmark Group, Inc. acted as the exclusive financial advisor for both sale-leaseback deals, while Hogan Lovells provided legal counsel. Additionally, Gagnier Communications assisted with strategic communications related to the transactions, helping to convey the company's vision and strategy throughout this process.

About Scholastic Corporation

With over a century of experience, Scholastic Corporation has established itself as a leader in children's publishing, education, and media. The corporation aims to inspire and engage children through quality content that fosters literacy and promotes educational opportunities. Scholastic’s diverse offerings include best-selling children’s books, classroom magazines, and captivating media that encourage a love for reading and lifelong learning among young people. The company serves audiences in over 135 countries, underpinning its commitment to arming future generations with the power of words and stories.

For the latest updates on Scholastic’s activities and business strategy, you can learn more at www.scholastic.com. Overall, this strategic shift with the sale-leaseback transactions positions Scholastic for a promising future marked by enhanced liquidity, operational efficiency, and sustained value creation for all shareholders.