AMD has entered into an agreement to sell and lease-back its ‘Lone Star Campus’ in Austin, Texas to an affiliate entity of real estate investment company Spear Street Capital. Upon closing, net of all fees, the sale is expected to generate approximately $164 million in cash.
At closing, AMD will enter into a 12-year lease with an extension option to continue its operations on the campus. The transaction is expected to close later this month.
The sale of its campus is in keeping with the company’s strategy to reduce investments and capital in non-core parts of the business, including real estate, says AMD.
In 1998, AMD sold, and currently leases-back its headquarters in Sunnyvale, Calif. In 2008, it sold, and currently leases-back its major site in Markham, Ontario, Canada. Recently, AMD also began marketing the sale of its Building 3 property in Austin, Texas. Building 3 is a largely unoccupied property whose operations and employees will be consolidated at other AMD sites.
AMD expects to record a special charge of approximately $50 million in the first quarter of 2013 primarily related to the difference between the sale proceeds and the carrying value of the property. The company employs approximately 1,900 people in Austin.
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