Culp Buys Mattress Fabrics Line

January 10, 2007  by in UnCategorized   

By Home Furnishings Business in Mattresses on January 2007 Culp, one of the world’s largest upholstery fabrics marketers, has purchased the Burlington House mattress fabrics product line from Greensboro, N.C.-based International Textile Group.

Culp, which is based in High Point, agreed to pay $2.5 million in cash and approximately 880,000 shares of its common stock to ITG in a deal that’s expected to close by the end of January.

An announcement from Culp valued the entire deal at around $8.3 million.

“We are pleased to announce this agreement with ITG and believe this transaction will further enhance our strong competitive position in mattress fabrics,” said Culp Chairman and Chief Executive Officer Robert Culp III in the company announcement. “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.”

He noted that mattress fabric accounted for approximately 40 percent of the Culp’s sales in its second fiscal quarter, and that investments in the segment over the last two years have committed the company to the business.

“We believe this transaction provides the opportunity to increase our annual sales in mattress fabrics by approximately $25 (million) to $30 million without any investment in fixed assets,” Culp said. “Culp has the necessary capacity in place to absorb the additional volume, and we look forward to working closely with ITG to ensure a smooth and orderly transition. This transition is expected to occur over the next four months. We are excited about extending our market reach in this important business for Culp.”

According to a company statement, ITG is selling Burlington House in order to focus on markets where it is able to differentiate itself. The company recently entered the auto fabrics business through a merger with Safety Components International.

“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,” said Joseph Gorga, ITG’s president and chief executive officer.