Woodard to be acquired by Craftmade International
Casual Living Staff -- Casual Living, December 19, 2007
Craftmade International, Inc., announced today it has entered into an agreement with Woodard, LLC, and CC Industries to acquire substantially all of the assets of Woodard, LLC, a leading Chicago-based designer, manufacturer and distributor of a broad line of outdoor furniture products and related accessories. The purchase price will be a combination of equity and cash. Completion of the acquisition, which is subject to a number of customary closing conditions, is expected to close on or about January 2, 2008.
Under the terms of the purchase agreement, Craftmade will acquire all plant, property and assets for the purchase price, subject to a post-closing working capital adjustment, of $19.3 million plus warrants to purchase 200,000 shares of common stock. The purchase price consideration will include 500,000 shares of common stock, valued at $8.10 per share which is based on the average closing price of CRFT shares for the three trading days prior to the signing of the agreement, with the remaining purchase amount to be paid in cash at closing. The working capital adjustment is contingent upon the delivery of $17.7 million in working capital.
Other assets include a long-term receivable valued at approximately $1.4 million and Woodard's 306,000 square foot manufacturing facility in Owosso, Mich. While management of Craftmade expects to complete this acquisition during its third fiscal quarter of 2008, there can be no assurance that the parties will be able to satisfy all conditions to which closing is subject under the agreement.
"We continue to look for ways to diversify our strong product offering and be less reliant on new home construction while leveraging our core marketing and distribution competencies," said James R. Ridings, Craftmade's chairman and chief executive officer. "The Woodard acquisition will be a strategic addition to our fast-growing outdoor product lines, and will allow us entry into the growing hospitality market, expand our retail customer base, and add a new independent distribution channel.
"Additionally, Woodard's manufacturing plants will provide us with more manufacturing flexibility without losing focus on our core capabilities. We will be able to provide new and existing customers with competitive pricing, continued exceptional product designs and high quality customer service. As with any of our potential acquisitions, the Woodard acquisition is expected to be immediately accretive to our earnings."
Craftmade International, Inc., founded in 1985 and based in Coppell, Texas, is engaged in the design, distribution and marketing of a broad range of proprietary ceiling fans, lighting products, decorative light bulbs, door chimes, ventilation systems and related accessories. The company distributes its premium products through a network of 1,600 showrooms and electrical wholesalers through a national sales organization of more than 54 independent sales representatives. Through its Trade Source International subsidiary, acquired in 1998, Craftmade distributes outdoor lighting, ceiling fan accessories and an indoor lighting line to the mass merchandiser market.