IHFC owners complete $275 million sale of High Point complex
May 3, 2011-- Home Textiles Today,
High Point, N.C. - Bassett Furniture Inds. said Tuesday it has completed the sale of its stake in the International Home Furnishings Center, and confirmed that it will be a minority partner in a new entity that owns three major High Point showroom complexes and the World Market Center in Las Vegas.
The company said the new owner, International Market Centers, L.P., now controls 10 million square feet of showroom space in the two cities, including the IHFC and the Market Square complex in High Point.
Bassett said the total value of the sale of its 46% stake in the IHFC was $275 million, including the assumption of $100 million in debt. The remaining $175 million will be distributed in cash to the IHFC's owners, and Bassett said it should realize a $74 million pre-tax distribution.
In turn, Bassett said it invested $2.4 million in exchange for a minority stake in IMC.
The majority owners of IMC are the investment firms of Bain Capital and Oaktree Capital Management. Joining Bassett as minority investors are the Related Companies, one of the original backers of the World Market Center, and an entity called Network World Market Center, which is headed by WMC founders Jack Kashani and Shawn Samson.
"This transaction represents a successful conclusion to (our original) investment and is a testimony to the sound management practices employed by the IHFC leadership and its associates, especially in a difficult period for the home furnishings industry," said Rob Spilman Jr., Bassett's president and CEO. "Despite the fact that most of its competitors were in financial disarray, the IHFC has remained profitable throughout the recession."
"On behalf of Bassett and its partners, I thank current and former IHFC management and associates for a job well done. I feel confident that as part of the newly formed International Market Centers, L.P. that the IHFC will carry on its longstanding tradition as the world's most successful home furnishings wholesale showroom entity," he added.
The company said it will use some of the IHFC proceeds to pay down debt and settle selected lease obligations from shuttered Bassett Furniture Direct retail stores.
The company also said it plans to invest in two to three new stores during the next several months.
In addition, Bassett's board of directors has reinstated a cash dividend and approved a share repurchase program that could cost up to $23.3 million.
The new dividend of 3 cents per share is payable June 1 to stockholders of record May 16. Bassett suspended its dividend in January 2009 after paying dividends uninterrupted for more than 70 years.
"It is gratifying to be able to reinstate a quarterly dividend, even at a more modest rate, after the suspension of our long standing dividend over two years ago," said Spilman. He said the company will monitor the pace of progress in the execution of its business plan with hopes of increasing the level of payout.
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