Culp acquiring ITG division ticking business
By Susan M. Andrews -- Furniture Today, January 29, 2007
High Point — Fabric supplier Culp is acquiring the ticking business of the Burlington House division of Greensboro, N.C.-based International Textile Group.
The deal, expected to increase Culp's ticking sales by $25 million to $30 million a year, includes inventory and the rights to produce ITG's ticking patterns. ITG is the company formed from the former Burlington House and Cone Mills.
Culp said it will pay ITG $8.3 million, including $2.5 million in cash and the remainder in Culp common stock.
The deal is expected to be completed by the end of January.
Ticking accounted for $23.5 million of Culp's sales in its most recent quarter, ended Oct. 29, or about 40% of its total business.
"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," said Rob Culp III, chairman and CEO.
"As a result of the substantial investments we have made in this business segment over the past two years, we are firmly committed to the future of the mattress fabric business," he said.
Culp will not acquire any fixed assets in the deal.
Rob Culp said the company has the capacity in place to absorb the added volume.
"We are providing solutions for customers and we plan to work with ITG to ensure an orderly transition of the business," he said.
Joseph Gorga, president and CEO of ITG, said his company has entered the automotive fabrics business and is focusing on highly engineered technical fabrics.
He added, "We believe consolidation within the industry is a positive step in reducing overcapacity and providing a more viable industry going forward."
Gorga said ITG will work with Culp to explore global partnership opportunities, including the use of ITG's China operations.
