by MARTINSVILLE, Va. — Hooker Furnishings is entering the outdoor furniture category with the recently completed purchase of Sunset West, a California-based manufacturer of outdoor furniture.
According to a filing with the United States Securities & Exchange Commission the company paid $23.5 million in cash at closing along with an additional $2 million that is subject to an escrow arrangement and possible earn-out payments to the Sunset West Members up to an aggregate of $4,000,000. The closing cash consideration is also subject to adjustment for customary working capital estimates.
The Sunset West management team and all its employees will continue to operate from its Vista, Calif., headquarters.
The purchase allows Hooker Furnishings to enter a new product category with an established line of outdoor furniture, without having to develop it from the ground up.
“As consumer lifestyle trends have shifted to spending more time outdoors, they want the same quality and design they have inside of their homes,” said Hooker Furnishings CEO Jeremy Hoff. “The Sunset West brand and its people bring so much to the table by becoming part of the Hooker Furnishings family of brands. They are experts in the category who understand the market, the value proposition and product sourcing, giving us immediate credibility in the segment that it would have taken years to build ourselves.”
Sunset West CEO Wes Stewart said the sale quickly allows his company to have warehousing and stronger distribution in the eastern and central regions of the country. It also gives the company access to Hooker Furnishings’ showroom in High Point and allows it to sell to its large retail and interior design customer base.
“Partnering with a legendary name in the industry like Hooker Furnishings was paramount to our strategy,” Stewart said. “The convergence of outdoor and indoor furniture gives us both stronger product offerings and opportunities. The price points and channels of both our companies align extremely well.”
According to a release, industry acquisition specialists Stump and Company initiated the transaction and were advisers to Sunset West. Hooker Furnishings was represented by McGuire Woods.
