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From Home Furnishing Business

Dorel to Acquire Hong Kong Youth Supplier

Canadian youth furniture producer Dorel Inds. (TSX: DII-B) has agreed to acquire the juvenile segment of Hong Kong-based Lerado Group, a producer of youth furniture and other baby products, for $120 million.

Lerado Group is a subsidiary of publicly traded Lerado Group Holding (HKSE: 1225.HK). 

"This is a sound investment in our future to ensure that going forward we control our own destiny," said Martin Schwarz, Dorel president and CEO. "This venture will allow us to be more flexible in an increasingly changing environment. It has become more important than ever to be vertically integrated and be in direct control of our supply chain."

The acquisition will give Dorel its first company-owned factory in Asia. The plan is for the existing Lerado management to oversee the facilities along with Dorel employees who will be joining the Asian team.

Lerado also has a research and development center in Taiwan that will complement Dorel's existing team. Dorel is hopeful that the acquisition will accelerate its plans to grow in the Asian marketplace.

The deal is subject to regulatory review and approval by the Lerado shareholders. The acquisition is expected to close in the fourth quarter.

The sale includes a total of four facilities—three based in China and the research facility in Taiwan. Total assets encompass 2.5 million square feet of production, research and development and testing spaces, along with office space.

"Dorel has built its juvenile business into a global player by focusing on several key pillars; great quality products, diversity of strong brands and a strong distribution model," said Jean-Claude Jacomin, Dorel juvenile group president. "Now with these additional excellent facilities in Asia, our strategy to maintain and grow our leadership in the industry is further strengthened."




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