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ITG & Culp together for mattress business

12
Jan '07
Culp Inc announced the company has signed an asset purchase agreement with International Textile Group Inc (ITG). Based in Greensboro, North Carolina, ITG manufactures and supplies textile products worldwide.

Pursuant to the terms of the agreement, Culp will acquire certain assets of the mattress fabrics product line of ITG's Burlington House Division, including inventory and the rights to produce ITG's mattress fabric patterns.

The total value of the transaction is approximately $8.3 million, comprised of $2.5 million in cash with the remainder to be paid to ITG in Culp common stock. The transaction is anticipated to close by the end of January 2007.

Commenting on the announcement, Robert G. Culp, III, chairman of the board and chief executive officer of Culp, Inc., said, "We are pleased to announce this agreement with ITG and believe this transaction will further enhance our strong competitive position in mattress fabrics.”

“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. Mattress fabric is an important part of our business and accounted for approximately 40 percent of the company's sales in our second fiscal quarter. 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. “

“We believe we are well positioned as the leader in our industry and have a globally competitive cost structure. We believe this transaction provides the opportunity to increase our annual sales in mattress fabrics by approximately $25 to $30 million without any investment in fixed assets. “

“Culp has the necessary capacity in place to absorb the additional volume, and we look forward to working closely with ITG to ensure a smooth and orderly transition. This transition is expected to occur over the next four months. We are excited about extending our market reach in this important business for Culp."

Culp Inc


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