Steelcase Inc., a global office environments manufacturer, announced the pending acquisition of one of the leading office furniture manufacturers in China. The transaction will significantly increase Steelcase's ability to serve customers in the Asia Pacific region.
Steelcase has entered into a definitive agreement with Ultra Group Holdings Limited to purchase all of the stock of Ultra Group Company Limited (UGCL), a wholly-owned subsidiary of Ultra Group Holdings that owns all of the assets associated with the Ultra office furniture business. Ultra manufactures and sells a wide offering of seating, desks, systems and storage products for the Chinese and broader Asian market. Ultra's fiscal year 31 March 2007 sales revenue was approximately US$38.4 million.
Steelcase has agreed to purchase the UGCL shares for a cash purchase price of US$13.28 million, subject to certain post-closing purchase price adjustments. The transaction is expected to be completed during Steelcase's third fiscal quarter of 2007, subject to prior approval by the shareholders of Ultra Group Holdings and other customary closing conditions.
The acquisition will add over 1,000 people to Steelcase's operations in China, from a factory in the Guangdong province and showroom/sales offices in Hong Kong, Beijing, Shanghai, and Guangzhou. After the transaction is closed, Ultra will continue to operate as an independent organization and brand in Greater China and the Asia Pacific region, and Ultra's current chairperson, Wendy Cho, and her existing management team will continue to lead the organization as it becomes part of Steelcase's Asia Pacific operations.
"This acquisition will not only increase our scale of operations and market share in Greater China, but will also provide broader capabilities in distribution, product portfolio, and manufacturing to support the expansion plans of our customers throughout Asia. The addition of Ultra will significantly increase our presence in China, and will enhance our position as the leading furniture supplier for innovative companies across Asia," said James P. Hackett, Steelcase Inc. president and chief executive officer. "One of our corporate growth strategies is to pursue emerging markets, and this addition is a calculated effort to execute against that plan."
Wendy Cho, Ultra Group Holdings chairperson added, "Combining Steelcase's worldwide industry leadership and workplace knowledge with Ultra's local capabilities and relationships will dramatically improve the competitiveness and value proposition for both brands in Greater China and the Asia Pacific region. We believe this strategic combination will give Ultra the ability to maintain the strong growth levels achieved in recent years."
About Steelcase Inc.: Steelcase, the global leader in the office furniture industry, helps people have a better work experience by providing products, services and insights into the ways people work. The company designs and manufactures architecture, furniture and technology products. Founded in 1912 and headquartered in Grand Rapids, Michigan, Steelcase (NYSE:SCS) serves customers through approximately 13,000 employees and dealers at over 550 locations worldwide. Fiscal 2007 revenue was $3.1 billion. Learn more at www.steelcase.com.
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