Search Twitter Facebook Digital HFBusiness Magazine Pinterest Google

Get the latest industry scoop


Daily News

From Home Furnishing Business

Stanley Inks $16.1 Million Sale Agreement

Stanley Furniture (NASDAQ: STLY), a legacy furniture producer that has struggled to turn a profit in recent years, said it has agreed to sell substantially all of its assets to a company owned by the chairman of Vietnam-based strategic planning and logistics firm.

Stanley said the purchase price is $16.1 million, including $11.5 million in cash and a $4.6 million promissory note. In addition, Stanley will get a 5% equity stake in the new company.

Under terms of the agreement, the acquired assets will be owned by a new company called Churchill Downs Holdings Ltd. that was formed by Walter Blocker, chairman of the Vietnam Trade Alliance, which is based in Ho Chi Minh City.

Blocker’s company also will assume most of Stanley’s liabilities, but Stanley will retain some assets, including up to $1.5 million in cash, the net operating loss carryforwards that have been accumulated during its recent unprofitable quarters, and any anti-dumping duties Stanley might receive under the Continued Dumping and Subsidy Offset Act.

“Stanley is an iconic company in the furniture industry dating to 1924 with a history of excellence,” Blocker said in a statement announcing the deal. “We are proud to have entered into an agreement to acquire the Stanley business and look forward to building on the company’s great past following the transaction closing.” 

In a filing with the Securities and Exchange Commission, Stanley said it will not liquidate after the transaction closes. Instead, the company’s board will “evaluate alternatives” for use of the cash purchase price, which may include a special dividend to shareholders, repurchase of existing shares, or acquire “non-furniture related assets that will allow the company to potentially derive a benefit from its net operating loss carryforwards.”

According to the SEC filing, the purchase agreement can be terminated by either party if the sale has not closed by Feb. 28.  If the sale isn’t completed, Blocker’s company must pay Stanley a $750,000 termination fee under certain circumstances.

The transaction must be approved by Stanley’s shareholders, but no date has been set for a stockholders meeting.

Blocker’s company, Churchill Downs Holdings Ltd., is not affiliated with Churchill Downs Inc., the publicly-traded company that owns the famous Louisville, Ky., race track and several other race tracks and casinos.

Stanley also announced that its board of directors elected Steven A. Hale II as chairman. He replaces John “Ian” Lapey who will remain on the board.

“The board of directors approved this transaction after an extensive review of alternatives. We appreciate Ian Lapey’s leadership as chairman during this process” Hale said.

Stephens Inc. served as financial advisor to the company’s board of directors.  Nu Advisory Group of Ho Chi Minh City advised on the transaction on behalf of the buyer.

Comments are closed.
Performance Groups
HFB Designer Weekly