STLY (.92) Throws In The Towel
HIGH POINT, N.C., Nov. 20, 2017 (GLOBE NEWSWIRE) -- Stanley Furniture Company, Inc. (STLY) announced today that it has entered into an agreement to sell substantially all of its assets to Churchill Downs LLC (“Buyer”) for $11.5 million in cash, a $4.6 million subordinated secured promissory note of Buyer, a 5% equity interest in Buyer’s post-closing parent company and the assumption of substantially all the Company’s liabilities. The Company will retain certain assets, including cash in an amount up to $1.5 million, net operating loss carryforwards and any remaining payments under the Continued Dumping and Subsidy Offset Act. Buyer is a Delaware limited liability company formed by Walter Blocker, Chairman of Vietnam Trade Alliance in Ho Chi Minh City, to acquire the Stanley assets.
The closing of the asset sale, which is subject to approval by the Company’s stockholders, Buyer obtaining financing pursuant to existing financing proposals from North Mill Capital LLC and Endurance Capital Group, and other customary closing conditions, is expected to occur in the first quarter of 2018.
Upon the signing of the agreement, Buyer delivered into escrow a $750,000 deposit towards the $11.5 million cash consideration for the sale. If Buyer is unable to obtain financing or the agreement is terminated for certain other reasons, the Company is entitled to receive the deposit as a termination fee.
The Company does not intend to liquidate following the closing of the transaction. The Company’s board of directors will evaluate alternatives for use of the $11.5 million cash consideration, which are expected to include using a portion of the cash to either repurchase Company common stock or pay a special dividend to stockholders, and also using a portion of the cash to acquire non-furniture related assets that will allow the Company to potentially derive a benefit from its substantial net operating loss carryforwards. The Company anticipates transaction costs including professional fees and change in control payments to be approximately $2.5 million.
Walter Blocker, Chairman of Vietnam Trade Alliance in Ho Chi Minh City, stated that “Stanley is an iconic company in the furniture industry dating to 1924 with a history of excellence. We are proud to have entered into an agreement to acquire the Stanley business and look forward to building on the Company’s great past following the transaction closing.”
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