Apparel manufacturer Veltex Corporation has signed a letter of intent to purchase logo embroiderer MKL Inc in an unspecified cash plus stock transaction.

Veltex CEO Javeed Matin described the move as a "significant" step towards expanding the Calfornia-based company's distribution capabilities.

"The acquisition should put us on track to reach our goal of exceeding $5 million in domestic sales this year because it allows us to offer the full range of services from manufacturing the textiles and clothing to adding the final touch of embroidered logos and decorative designs," he said.

"We can produce apparel in both standard styles and custom order with whatever embroidered detail our customer wants, and since we do it all, our prices are exceptionally good."

Veltex operates under two divisions, Veltex Apparel and Velvet Textile Mills, which specialise in the production of caps, apparel and apparel accessories for the promotional products industry, and the manufacture of velvet and denim fabrics, respectively.