Sun Capital sells US-based Lexington Home Brands to Chinese buyers

Financial terms were not disclosed, but the Chinese listed company revealed in a filing in November that the transaction value would not exceed $81.45 million. The two buyers formed a joint investment fund worth RMB500 million ($72 million) - almost all of which came from Luolai - to finance the acquisition. Under the new ownership structure, Lexington's current senior management team, led by CEO Phil Haney, will remain unchanged.

Founded in 1903, Lexington designs and manufactures case goods and upholstered furniture under a portfolio of brands including Lexington, Tommy Bahama Home, Tommy Bahama Outdoor Living, Sligh and Artistica. Products are distributed in the US and internationally through a network of home furnishings retailers, interior designers, showrooms and internet retailers.

Sun Capital typically invests in US lower to middle market companies with up to $1.5 billion in annual revenue, but many of its targets have sales between $50 million and $500 million. 

The GP invested in Lexington in 2002 when the company was struggling in the face of foreign competition. During the investment period, it altered the cost structure and business model, strengthened the company's distribution network, and expanded the product line, particularly in outdoor furnishings.

"Lexington represented a great opportunity to build a strong platform of globally-recognized furniture brands," Marc Leder, co-CEO of Sun Capital, said in a statement. "Over the course of our partnership the company turned from generating losses at the time we first invested to achieving industry leading profit margins."

Founded in 1992, Shanghai-based Luolai Lifestyle sells home textile products through a network of 3,000 stores in China. The company went public in Shenzhen in 2009. Its revenue rose to RMB2.92 billion in 2015 from RMB2.76 billion the previous year, but net profit dropped 12% year-on-year to RMB324 million in 2015.

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• Topics
• Greater China
• Trade sale
• Consumer
• Industrials
• USA
• manufacturing
• China
• Exit