Berkline/BenchCraft to recapitalize
By Larry Thomas -- Furniture Today, April 23, 2007
Morristown, Tenn. — Upholstery major Berkline/BenchCraft has announced a comprehensive recapitalization plan that will give the company a new owner and more than $40 million in new financing.
In addition to the financing, $40 million in existing debt will be swapped for new equity in the company.
"This agreement reflects our stakeholders' confidence in our ability to not only remain competitive in our market segment but also to position ourselves for continued profitable growth," said Bill Wittenberg, president and CEO.
Once the recapitalization package is finalized later this month, Wittenberg said a majority of the equity will be owned by "a leading private equity investment firm." He said the firm has asked that its name not be disclosed until the deal is completed.
The investment firm of Code Hennessy & Simmons has been the majority owner since March 2002, when Berkline and BenchCraft were spun off from LifeStyle Furnishings International.
Wittenberg said Code Hennessy may retain a small equity stake in Berkline/BenchCraft, but would no longer be the majority owner.
"We are now poised to take Berkline to a new level," he said. "We will continue our efforts to successfully execute the numerous initiatives at hand, and (we) intend to be more aggressive in our pursuit of the marketplace."
In the past nine months, the company has closed or consolidated operations, eliminated SKUs, and cut costs through more efficient offshore sourcing and integration of its manufacturing facilities and systems.
