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Interface signs definitive deal to sell its fabrics division

Jun '07
Interface Inc announced that it has entered into a definitive agreement to sell its fabrics division in an all-cash transaction valued at up to $70 million. The division, known as InterfaceFABRIC, is a leading producer of interior fabrics and upholstery products, which it markets under the Guilford of Maine, Chatham and Terratex brands, and provides specialized automotive textile solutions.

The fabrics division will be sold to an affiliate of Sun Capital Partners, a leading private investment firm. According to the terms of the agreement, Interface will receive approximately $63.5 million in cash proceeds at the closing of the transaction, with potential for an additional $6.5 million in cash proceeds, subject to the division meeting certain performance metrics over the subsequent six to eighteen months period.

The transaction is expected to close during the third quarter, subject to regulatory review and other customary closing conditions. Upon closing, the transaction is expected to be accretive to Interface's results by approximately $0.05 to $0.08 per diluted share on an annualized basis.

In the second quarter of 2007, the Company expects to reflect the fabrics division as discontinued operations in its financial statements, and record an after-tax, non-cash loss of approximately $9.0 million, or $0.15 per diluted share, as well as other after-tax exit costs and expenses estimated at $5.0 million, or $0.08 per diluted share, as a result of thetransaction (of these exit costs and expenses, the Company estimates that between $3.8 million to $6.0 million represent pre-tax cash costs and expenses).

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