DUBUQUE, Iowa – Flexsteel Industries Inc. announced its Board of Directors, in consultation with its independent financial and legal advisors, has unanimously rejected the unsolicited, preliminary non-binding proposal from CSC Generation Holdings, Inc. to acquire the large residential furniture manufacturer for $20.80 per share in cash.
"After careful review and consideration of CSC’s unsolicited proposal, our Board determined that the proposal substantially undervalues Flexsteel, is opportunistic, and is not in the best interest of the company or our shareholders,” said Flexsteel Chairman Thomas M. Levine. “The Board is confident that the management team’s continued successful execution of Flexsteel’s strategic plan will generate superior long-term value for shareholders.”
Flexsteel President and CEO Jerry Dittmer added, “Following another record-setting sales year in fiscal 2022, we continue to make notable strides in executing our strategic plan, strengthening our supply chain and investing in talent, product innovation and digital capabilities. In addition, our commitment to driving profitable growth and continued focus on working capital management will enable us to generate strong free cash flow, further strengthen our balance sheet and invest in additional long-term growth initiatives. By leveraging our financial strength and executing the three legs of our growth strategy – expanding our sales distribution, driving growth through new product categories, and expanding into new consumer segments – we are confident in our ability to navigate macroeconomic headwinds and increase our market share as we deliver value for our customers, business partners and shareholders over time.”
CSC Generation's takeover bid was made public last week. CSC is a technology company that acquires store and catalog-based companies, and is a Flexsteel shareholder.
Flexsteel posted net sales for fiscal 2022 of $544.3 million. The company is currently ranked 28 on the FDMC 300 top North American wood products producers.
Headquartered in Dubuque, Iowa, Flexsteel Industries and its subsidiaries is one of the largest manufacturers, importers, and marketers of residential furniture products in the United States. Product offerings include: sofas, loveseats, chairs, reclining rocking chairs, swivel rockers, sofa beds, convertible bedding units, occasional tables, desks, dining tables and chairs, kitchen storage, bedroom furniture, and outdoor furniture. The company says a featured component in most of its upholstered furniture is a unique steel drop-in seat spring from which the name “Flexsteel” is derived.
Wells Fargo Securities, LLC is acting as financial advisor and Faegre Drinker Biddle & Reath LLP is acting as legal advisor to Flexsteel.
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