KVH Industries, Inc. has announced that it has entered into agreements to sell its Rhode Island office and factory for a combined $13 million.
The Middletown-based company also announced a $10 million share repurchase program authorized by its Board of Directors.
The sale of the Middletown facilities is expected to generate approximately $12 million in net proceeds after transaction costs. KVH plans to use these funds for working capital and potential strategic opportunities.
“We expect that the sale of our Rhode Island facilities will provide us with approximately $12 million, net of transaction costs, for working capital and potential strategic opportunities while also allowing us to move to a new facility better suited to our future needs,” says Brent Bruun, KVH’s chief executive officer, in a press release.
The company entered into a purchase and sale agreement with Knight Capital LLC on December 5, 2024, for its property at 75 Enterprise Center, Middletown, Rhode Island. The sale price is set at $8.5 million and includes related buildings, improvements, and other assets.
Upon completion of the sale, KVH will remain as a tenant under a triple-net lease for an initial term of six months. The company has the option to extend this lease for up to three additional months as it winds down manufacturing operations and identifies a new headquarters location.
A second agreement, signed on December 9, 2024, involves the sale of KVH’s property at 50 Enterprise Center, Middletown, Rhode Island, to 50 Enterprise LLC, a subsidiary of Seacorp, Inc. This sale is priced at $4.5 million and also includes related buildings, improvements, and other assets.
Both transactions are subject to customary closing conditions, with the 75 Enterprise Center sale also requiring specified zoning approvals.
In addition to the property sales, KVH’s Board of Directors authorized a share repurchase program on December 9, 2024. This program allows the company to buy back outstanding shares of KVH common stock for an aggregate purchase price of up to $10 million.
Bruun comments on the share repurchase program, saying, “The Board’s authorization of a share repurchase program also underscores our commitment to the Company’s shareholders. It reflects our confidence in the company’s strategy, strong balance sheet, and ability to leverage the strategic opportunities that lie ahead to build long-term value.”
The repurchase program gives KVH management discretion to buy back shares through various means, including open market purchases, privately negotiated transactions, block transactions, or accelerated repurchase agreements. The company may choose to make purchases under Rule 10b-18 or Rule 10b5-1 of the Securities Exchange Act of 1934.
The timing and volume of share repurchases will depend on factors such as share availability, price, market conditions, alternative uses of capital, liquidity, general business conditions, and applicable regulatory requirements. KVH is not obligated to repurchase any minimum number or dollar amount of shares, and the program may be modified, suspended, or terminated at any time without prior notice.
KVH Industries, founded in 1982, is a global leader in maritime and mobile connectivity delivered via the KVH ONE® network. The company provides connectivity solutions for commercial maritime, leisure marine, military/government, and land mobile applications on vessels and vehicles.
With these strategic moves, KVH aims to optimize its operations and enhance shareholder value while maintaining its position as a key player in the maritime and mobile connectivity industry.
KVH Industries has not commented on where they are looking to locate their new headquarters facility.