AMD to sell Austin campus, then lease

AUSTIN (KXAN) - AMD is selling its Austin campus in an effort to release cash flow, the company says.

The Sunnyvale, California based company entered into a sale and lease-back agreement for its Lone Star Campus.

The campus, located at 7171 Southwest Parkway will be leased by Southwest Parkway Holdings, LP an affiliate entity of real estate investment company Spear Street Capital.

The sale is expected to generate $164 million in cash for AMD and will be reflected in their first quarter financial statements.

The agreement also includes a 12-year lease with an extension option to continue its operations on campus.
“As we reset and restructure AMD for long-term success, we are taking a number of steps designed to optimize our business and monetize assets,” said Devinder Kumar, chief financial officer of AMD. “The sale of our Austin campus will unlock a significant amount of capital, while the multi-year lease back of our Austin campus reconfirms our long-term commitment to the city that so many AMD employees have called home since 1979.”

The sale of AMD’s Austin campus is in keeping with the company’s strategy to reduce investments and capital in non-core parts of the business, including real estate. In 1998, the company 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 located at 5900 East Ben White Boulevard in Austin, Texas. Building 3 is a largely unoccupied property whose operations and employees will be consolidated at other AMD sites.

The company 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. AMD employs approximately 1,900 people in Austin.

The sale, pending approval, is expected to close on March, 26.