Leggett Acquires 5 Furnishings Component Companies

Furniture World News

Fortune 500 diversified manufacturer Leggett & Platt announced five acquisitions. Collectively, these acquisitions should add about $85 million to annual company revenues, and also provide approximately $20 million of store fixtures manufacturing in Asia. Ikex /Jarex: Early in October the company acquired the assets of Ikex, Inc. and the membership interests of Jarex Distribution LLC, which should add almost $65 million in annual sales to the Residential Furnishings segment. Together, the two companies have approximately 130 employees and seven distribution facilities. This acquisition significantly enhances Leggett’s presence in the converting and/or distribution of geotextiles, erosion control products and silt fencing for the geotextile, landscape, and agricultural markets. Geotextiles are synthetic fabrics (typically polypropylene, polyethylene or polyester) used in a variety of landscaping applications including ground stabilization, drainage protection, erosion control and weed control. The highly-fragmented market for geotextiles is believed to approximate $900 million annually, and contains mostly small, regional suppliers. Principal customers include dealers, contractors, landscapers, road construction companies, golf courses, and government agencies. Leggett anticipates competitive advantage arising from national presence, purchasing leverage, economies of scale, and distribution and marketing infrastructure. Leggett, through its Hanes Companies, is a significant converter of fabric (large volumes of fabric are efficiently cut to a variety of smaller sizes) for numerous end uses. These acquisitions will join Leggett’s current geotextile operations at the Hanes Companies; collectively, the geotextile businesses will provide approximately $80 million of annual revenue. John Dowdell, President of Hanes Geo Components, will oversee integration and operation of these acquisitions. Shanghai Fixtures Facility: The company also is acquiring a store fixtures manufacturing facility in Shanghai, China. This facility, which has been a key supplier to Leggett’s U.S. operations, manufactures a broad line of retail store fixtures and gondola shelving. Its acquisition will enhance Leggett’s production of store fixtures by about $20 million; however, since nearly all of the facility’s product is sold to Leggett & Platt for distribution in the U.S., near- term annual sales revenues will be unchanged. Acquisition of this facility gives Leggett a well-developed operating presence in China from which to serve the growing domestic Chinese market, while continuing to meet existing U.S. demand. The operations include full steel fabrication resources, and both powder coating and chrome plating finish capability. The facility is modern (built in 2000), expandable, and well-situated to serve key Leggett customers. It offers an Asian base to expand L&P’s capability in gondola, wire, and wood manufacturing. The facility has approximately 460 employees, and runs two shifts per day. Jia Jiang Furniture Mechanism Facility Leggett recently acquired a motion furniture mechanism business in the city of Jia Jiang, northwest of Shanghai. This operation complements Leggett’s existing plant, located southwest of Shanghai, which began producing furniture mechanisms in the spring of 2003. This new acquisition should add over $10 million in annual revenue to the Home Furniture & Consumer Products group within the Residential Furnishings segment. With this acquisition, and the pending completion of a new facility in southern China, Leggett will have three mechanism manufacturing locations in China by the end of 2005. Small Acquisitions: Finally, the Home Furniture & Consumer Products group also added two small operations in North America, which together will add about $10 million in sales revenue. Westex International, located near Toronto, Canada, produces a full line of high quality down comforters for distribution to a wide range of department stores and specialty shops in Canada. This new product offering is part of Leggett’s recently launched “top of bed” category, and is sold in conjunction with our Fashion Bed Products. Everwood Products is a producer of metal rocker bases and specialty components for the residential furniture industry. Located in northern Mississippi, this small stamping and fabrication facility is primarily focused on producing motion mechanisms for upholstered furniture. In addition, they also possess in-house design capability for both component products and automated machinery. FOR MORE INFORMATION: Visit Leggett’s website at www.leggett.com. COMPANY DESCRIPTION: Leggett & Platt is a FORTUNE 500 diversified manufacturer that conceives, designs and produces a broad variety of engineered components and products that can be found in virtually every home, office, retail store, and automobile. The company serves a broad suite of customers that comprise a “Who’s Who” of U.S. manufacturers and retailers. The 122- year-old firm is composed of 29 business units, 33,000 employee-partners, and more than 300 facilities located in over 20 countries. Leggett & Platt is North America’s leading independent manufacturer of the following: a) components for residential furniture and bedding; b) retail store fixtures and point of purchase displays; c) components for office furniture; d) non-automotive aluminum die castings; e) drawn steel wire; f) automotive seat support and lumbar systems; g) carpet underlay; h) adjustable beds; and i) bedding industry machinery for wire forming, sewing and quilting. Primary raw materials include steel and aluminum. Main operations include metal stamping, forming, casting, machining, coating, welding, wire drawing, and assembly.