Following months of negotiations aimed at selling the 840,000 square foot facility, a deal was announced on Tuesday for the factory to be bought by American company Global Net Lease (GNL).
The transaction is expected to be completed in the second quarter of this year and will include a 20-year lease for McLaren.
James Nelson, CEO of GNL, said: “We are excited to announce that this world-class facility will become part of the GNL portfolio.
“The McLaren Group Headquarters’ state of the art buildings have won numerous awards, were designed by renowned architect Norman Foster, and are the type of mission-critical, net-leased properties that make up the GNL portfolio.”
McLaren faced serious cash flow issues last year and, as it looked for ways to bolster its finances, it believed there was no benefit to having cash locked up in its factory facility.
It pursued a sale-and-leaseback deal to help deliver an instant financial boost, as it allows it to capitalise on the expansive facility in Woking and then reinvest that money in the company.
Daniel Ricciardo, McLaren MCL35M
Photo by: Mark Sutton / Motorsport Images
Speaking last year, McLaren CEO Zak Brown explained: “Why have all this money tied up in real estate? We’re not a real estate company. We’re a racing team and an automotive company. And that’s the start of the journey to start cleaning up the balance sheet [at McLaren].
“I think the majority of companies in this world don’t actually own the real estate that they are tenants of.
“We’ve got a lot of cash tied up in that building, as you can imagine, and that’s not a very productive use of funds when you’re looking to invest in your business.
“So we’ll ultimately sell it to someone. We will then do an extremely long term lease and then we’ll use that money to invest in our business to help us grow our business. So it’s a pretty typical financial restructuring exercise.”
Since the initial plans to sell the factory, McLaren’s financial situation has improved. Last year the team arranged a £150 million loan with the National Bank of Bahrain as well as attracting new American investors MSP Sports Capital, who bought a significant minority share in the team for £185 million.