MARTINSVILLE, Va. - Hooker Furniture Corp. plans to acquire Valdese, North Carolina-based upholstery manufacturer Shenandoah Furniture for $40 million.
 
The acquisition agreement includes substantially all of the assets and certain liabilities of Shenandoah, which has plants in Valdese and Mt. Airy, North Carolina., and Martinsville, Virginia.
 
"Shenandoah is a successful, growing, profitable company focused in a channel of distribution that is winning at retail, in which we are currently under-represented," said Paul B. Toms Jr., chairman and CEO of Hooker. "Lifestyle specialty furniture stores are gaining market share and doing well with multiple demographic groups. For that channel, domestically produced, customizable upholstery is extremely viable and preferred by the end consumer who shops there."
 
Hooker says Shenandoah will fit nicely in the brand's lifestyle specialty retail channel.
 
"We are continuing to leverage the financial strength of the company to boost revenues and earnings both organically and by acquisition, as we target growth in channels of distribution that are winning at retail," Toms said.
 
As an S Corp, Shenandoah earned $8 million in pretax income in its fiscal year of 2016.
 
"We expect the acquisition to be accretive to earnings in the first full fiscal year, which will start Jan. 29, 2018," Toms said. "Short-term, we expect a nominal reduction per share to earnings for the balance of the fiscal year 2018 due to the timing of the acquisition in our fiscal year and some short-term additional expenses related to the acquisition."
 
Hooker says Shenandoah will operate as a stand-alone business led by Candace Payne, the company's current president. There are no anticipated changes to staff.
 
"We have known the Hooker family and management team for years, since both of our businesses were founded by our families in Martinsville," said Payne. "We're excited about partnering with a company with the integrity level of Hooker Furniture. We will continue to operate as a family-run business, just as we are today, knowing we have the full support of the Hooker Furniture team."