M&A Briefing: Quarter 1, 2015

March is the best time of the year. Spring weather has arrived, the fairways have green grass, the NCAA basketball tournament has begun, and the Masters is right around the corner.

For the furniture industry, spring marks the beginning of a fantastic run of markets: Southeast Asian markets, April High Point, HD-Vegas in May and Neocon-Chicago in June. Huge times for all sectors of the furniture industry to see customers, present new products and to advance their strategic vision.

2015 marks our 25th anniversary of being in business – certainly a celebration and a continuation of Ralph Stump’s formation of the original Stump business in 1974. As noted earlier this year, we now have the 3rd generation (John [JRS III] and Bo [TAS Jr.]) working at our firm, signaling the Stump commitment to our industry for the long-term.

Mergers & Acquisitions are the talk of the industry, and our business is performing at record levels.

Just last week we announced the sale of Highmark Smart, Reliable Seating to OFS Brands. Highmark is a leading manufacturer of ergonomic and task seating based in Huntington Beach, CA. This is a major strategic acquisition for OFS, based in southern Indiana, and a game-changer for this office/contract player.

In January we announced the sale of Dicey Mills to Valdese Weavers. Both companies are prominent suppliers to the upholstery industry, and this transaction showcases how large, strong companies such as Valdese Weavers are seeking growth via acquisition and product line extension.

Several other transactions occurred privately in the First Quarter, 2015, and we were pleased to play quiet advisory roles in those deals. Our valuation and negotiation skills are increasingly being requested as parties attempt to put transactions together.

There is a renewed interest in Mexico as an alternative to Asia, given its comparative costs, no tariff/duty issues, and proximity to the US market. We have had the pleasure of touring some amazing Mexican factories this year, and hope to announce a transaction or two as a result of these efforts.

Residential, hospitality and office/contract sectors are all performing well, and we expect to see the merger and acquisition trend continue across these vertical sectors. Start planning now, and call us if we can be of assistance.

Quote of the year: "Someone is sitting in the shade today because someone planted a tree a long time ago." - Warren Buffett

See you at the market!