Taiwan co. to buy Master Design
By Clint Engel -- Furniture Today, March 4, 2002
ONTARIO, Calif. — Case goods supplier Master Design has found a buyer in Taiwanese conglomerate Test-Rite International, in a deal that will leave management on board and sever ties to its troubled former parent.
A California court approved the sale of Master Design to Taipei-based Test-Rite last week and the deal was expected to close this week, said Gene Hodges, Master Design president and chief executive officer.
Court records said the buyer will pay $13.5 million and also will assume some debt.
All Master Design employees will be offered jobs and management will remain intact, although it has no ownership stake at this point, Hodges said.
Test-Rite, publicly traded on Taiwan's stock exchange, is the largest sourcing company in Asia, he said. It generated U.S. sales of more than $500 million last year in products including hardware, outdoor furnishings and automotive accessories to companies such as The Home Depot, Target, Wal-Mart and Staples.
Acquisition of Master Design signals Test-Rite's entry into the mainstream U.S. furniture industry, Hodges said.
The sale, along with the pending sale of former sister company Wickes Furniture of Wheeling, Ill., should end the companies' trying history with Master Home USA, the U.S. subsidiary of parent Master Home Furniture Co. Ltd. of Taiwan. Master Home has faced financial troubles for three years and filed a reorganization petition in Taiwan early last year.
Hodges and Wickes CEO John Klein have long maintained that Master Home's problems had no effect on the U.S. companies' operations.
But it's clear that with the sale, a cloud will be lifted from Master Design.
"It's very positive," Hodges said. "We've had to operate the last three years with the financial crisis that the parent company experienced. This sale allows us to move away from that situation and gives everyone in the organization a fresh breath of air and excitement for new opportunities."
The acquisition shouldn't dramatically affect Master Design's direction or sourcing practices, he said. After Master Home's fall from grace, Master Design began moving away from the factories controlled by Master Home in Taiwan and northern China, and diversifying into factories across Asia.
He said that if anything, the new ownership will make Master Design more marketing-driven and less manufacturing-driven.
"This gives us the opportunity to market a much more diversified product line," said Hodges.
The company will continue to operate out of its Ontario, Calif., headquarters and Altamonte Springs, Fla., sales and marketing office.
| Hodges |
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