DUBUQUE, Iowa – Following its rejection of CSC Generation’s bid to acquire the company, Flexsteel’s President and CEO Jerry Dittmer sent a letter to dealers explaining its decision.
Dittmer told dealers that the proposal to acquire the company for $20.80 per share in cash substantially undervalues the company. He went on to say that the company remains in a strong financial position to continue providing “exceptional service and relevant product solutions to you our valued customers.”
He said Flexsteel won’t speculate on what CSC might do next, adding, “but I want to assure you that it’s business as usual here …”
CSC Generation Chairman and CEO Justin Yoshimura, responded to emails from Home News Now, but declined to answer questions regarding Flexsteel, including whether or not his company intends to counter with another proposal.
In his letter to dealers, Dittmer also described several key initiatives in which the company is expanding its capacity to support growth, including its new plants in Juarez and Mexicali, Mexico, plus a new distribution center in Greencastle, Pennsylvania.
The full letter is below:
Dear Valued Customer,
You may have seen last week that Flexsteel received an unsolicited, preliminary non-binding proposal from CSC Generation Holdings, Inc. (“CSC”) to acquire the Company for $20.80 per share in cash. Earlier this morning, we announced that our Board of Directors, after careful review with its independent financial and legal advisors, has unanimously rejected the offer, as we believe it substantially undervalues our company.
Flexsteel is in a strong financial position and remains well situated to continue providing exceptional service and relevant product solutions to you, our valued customers. Over the past two years, we’ve achieved historical record sales and adjusted earnings per share while investing aggressively in capabilities and capacity to support profitable growth with you, including new manufacturing plants in Juarez, MX and Mexicali, MX, a new distribution center in Greencastle, PA, and significant talent investments throughout our organization. We remain highly confident in our strategic plan, which will drive product innovation and continued service improvements while generating attractive financial returns to our shareholders and funding continued investments to support and grow with our loyal customers.
I want to assure you that our focus on serving you is unchanged, and I am confident that we are well positioned to successfully navigate the ongoing macroeconomic headwinds and deliver value for you. Our relationship is an integral part of our business, and your trust and support are key to our success.
We won’t speculate on what CSC might do next, but I want to assure you that it’s business as usual here at Flexsteel. We are continuing to focus on our strategy, and you should not anticipate any changes on how we work together. We look forward to seeing you in High Point soon.
As always, we thank you for your continued trust and partnership.
Jerald K. Dittmer
President & CEO