Private equity investment firm Sovereign Investment Co. has completed sales/leaseback transactions worth $8.6 million for Phoenix, Ariz.-based Fletcher’s Tire & Auto Service.
"Sovereign completed the sale/leaseback transactions for Fletcher’s Tire for five real estate assets in the greater Phoenix metropolitan area," say Sovereign officials.
"The properties will be leased back for 20 years. Proceeds from the transaction enable Fletcher’s Tire to free up capital and pay down debt to continue the company’s expansion.
"A sale/leaseback takes place when an operator of a store is seeking capital to expand business, pay down debt, etc.," a Sovereign spokesperson has told moderntiredealer.com.
"We purchase the real estate and the operator leases it back. Our leases are triple net and therefore the operator pays for insurance, property taxes and maintenance. Sovereign has purchased the real estate, but (Fletcher's Tire) will maintain the business."
Fletcher's Tire operates 28 locations within the greater Phoenix and Tucson, Ariz., markets. It is the 36th largest independent tire store chain in the United States, according to Modern Tire Dealer research.
