USA: Crown Crafts Sells Woven Products Arm For $40m
Crown Crafts, Inc (NYSE: CRW), today announced it signed a definitive agreement to sell its woven products business to Mohawk Industries, Inc (NYSE: MHK). The sale included inventory, buildings, machinery and equipment at sites in Calhoun, Dalton and Chatsworth, Georgia; Blowing Rock, North Carolina; and Manchester, New Hampshire. The sale proceeds are estimated at $40m, subject to adjustment based upon the inventory at closing, which is projected to occur before the end of the year. The woven products business has annual sales of approximately $85m and about 600 employees, most of which will receive offers of employment from Mohawk.Michael H. Bernstein, Crown Crafts' chief executive officer, said: "Selling this business was an extremely difficult decision because wovens have been the core of Crown Crafts' business for many years. However, given the changes in the textile industry, we had to consider every alternative and Mohawk's strong manufacturing position will enable them to leverage the value of these assets. We will work with Mohawk to ensure a smooth transition for our employees, customers, and suppliers. Although we expect to incur a book loss of approximately $10m on the sale, this transaction will enable us to make a substantial reduction in our debt and restructure the remaining businesses to restore profitability."
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