ITG Selling Mattress Fabrics Unit to Culp
January 15, 2007-- Home Textiles Today,
International Textile Group (ITG) will sell the mattress fabrics unit of the Burlington House division to High Point, N.C.-based upholstery and bedding fabric producer Culp, Inc. for $2.5 million in cash and approximately 880,000 shares of Culp common stock, with the deal expected to close by the end of January.
Culp said the total value of the deal will be about $8.3 million.
ITG said the sale would include the current inventories and related intellectual properties of the mattress fabrics product line.
Joseph Gorga, president and ceo, ITG, noted, "The consolidation of the Burlington House and Culp mattress fabrics product lines will provide mattress customers with a cost competitive focused supplier and will allow ITG the opportunity to invest the proceeds in expanding its global footprint in its core businesses."
"ITG has made the strategic decision to discontinue its U.S. mattress fabrics product line and we view this as a great opportunity for Culp," said Culp chairman and ceo Robert Culp III. "We believe this transaction provides the opportunity to increase our annual sales in mattress fabrics by approximately $25 to $30 million without any investment in fixed assets."
The transition of products is expected to take place over the next 90 to 120 days. Going forward, International Textile Group and Culp will work together to explore global partnership opportunities including the utilization of ITG's China operations.