by The 2 companies, part of Home Meridian International, were acquired by Hooker Furniture in 2016
HIGH POINT — Case goods resource Hooker Furnishings has entered into a definitive agreement to sell case goods resources Pulaski Furniture and Samuel Lawrence Furniture to Magnussen Home Furnishings.
The two companies have been part of Hooker Furnishings’ Home Meridian International (HMI) division since the company purchased HMI in 2016.
The company said that according to the asset purchase agreement the estimated purchase price will be determined and paid at closing based upon the “net book value of the assets being sold in the transaction.” As of Nov. 2, or the end of the company’s fiscal third quarter, the estimated purchase price would be $4.8 million.
The purchase is expected to close in mid-December.
As part of the sale, the company also said it will shed about $4.8 million in Home Meridian showroom lease liabilities and related expenses once Magnussen assumes the lease of the HMI showroom in High Point.
Hooker Furnishings said it will retain the Samuel Lawrence Hospitality brand, part of HMI.
“Today’s announcement is a major step in our multiyear effort to streamline our portfolio and strengthen profitability by sharpening our focus on brands that generate consistent earnings,” said Jeremy Hoff, chief executive of Hooker Furnishings. “We are excited to move forward as a nimbler business with an efficient cost structure and clear growth priorities. We have promising growth opportunities on the horizon following the launch last month of our Margaritaville licensed collection. Together with our remaining portfolio and ongoing cost reductions of over $25 million, we are more confident than ever that we are well-positioned to enhance shareholder value.”
The company said 10% of the purchase price paid at closing will be subject to a holdback for 210 days for customary indemnification and final purchase price adjustments.
In connection with the transaction, the company also said it expects to record “$5 million to $6 million in non-cash impairment charges, net of expected lease gains upon termination. These impairment charges are primarily related to the write-down of HMI intangibles and fixed assets.”
“This acquisition expands our design reach and strengthens our leadership in case goods,” said Nathan Cressman, chief executive officer of Magnussen Home. “Our goal is to build a broader house of brands that gives retailers more choice across design styles and price points. Pulaski and Samuel Lawrence each have strong followings and long-standing reputations. Combined with Magnussen’s capabilities, these brands will offer retailers more depth, more options and more reasons to partner with us.”
“This is an important strategic addition for Magnussen,” added Magnussen President Doug Townsend, who spent over 12 years in senior leadership roles at Home Meridian working with both brands. “These are storied brands with committed retail partners and decades of product success. With Magnussen’s scale, supply-chain depth, and investment focus, we see a clear path to strengthening these brands and expanding their relevance in today’s market.”
Stump & Co. served as financial adviser to the company and McGuireWoods LLP served as legal adviser to the company in connection with the sale transaction.
