MARTINSVILLE, Va. — Hooker Furniture Corp. has agreed to purchase Home Meridian International, a move which will more than double the company's size and make it one of the top five U.S. sources of upholstered furniture and casegoods.

Announced Jan. 6, the $100 million acquisition is being called the largest in Hooker Furniture's (NASDAQ:HOFT) 91-year history. The asset purchase agreement includes $85 million in cash and $15 million of newly-issued HOFT stock. The transaction is expected to close in the first quarter of 2016, subject to regulatory and customary closing conditions; Hooker said approval by its shareholders is not required.

Revenues for the combined companies over the trailing 12 months ending October 31, 2015, were in excess of $550 million.  During the same time period operating income for the combined companies, which includes approximately $3.5 million of deal related costs, was $35.6 million. Both Hooker Furniture and Home Meridian are listed in the FDMC 300, a ranking of the top wood products manufacturers and importers in North America.

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According to a statement from Hooker, HMI will operate autonomously as a division of the residential furniture manufacturer and importer. HMI will continue to be led by CEO George Revington and his current management team, with Revington assuming the title of president and COO of the division. Revington will report to Paul Toms Jr., Hooker Furniture Corp. chairman and CEO.

"We are unbelievably excited at the prospect of having the individual businesses that comprise Home Meridian International become part of our Hooker Furniture Corp. stable of brands," Toms said. "Pulaski Furniture, Samuel Lawrence Furniture, Prime Resources, Sourcing Solutions Group, Right 2 Home and Samuel Lawrence Hospitality are all vibrant, well-run businesses addressing more moderate price points and some channels of distribution not currently served by the Hooker Furniture, Sam Moore, Bradington-Young, Homeware and/or H Contract brands," he added.

"HMI's strategy of providing proprietary products and custom business solutions to large customers and alternative channels of distribution, as well as growth in its traditional business, has yielded a compound average annual sales growth rate of over 15 percent during the last four years," Toms added. "Growing sales at three times industry average is validation of their strategy."

Revington also noted the benefits of the merger adding, "The success of these two companies is directly related to how they serve their customers and the new combination will make us even more effective and provides a great platform for future growth."

Already an importer, Hooker Furniture will look to leverage HMI's presence in Vietnam, China and Malaysia "for enhanced vendor management and customer service," Toms said.

The HMI division's headquarters will continue to be located in High Point, North Carolina, and Hooker Furniture Corp.'s headquarters will remain in Martinsville, Virginia, the statement said. The combined global footprint of the companies will include upholstery manufacturing facilities in Hickory, North Carolina, and Bedford, Virginia, showrooms in High Point and Ho Chi Minh City, Vietnam, and eight distribution centers in North Carolina, Virginia, California, China and Vietnam. Combined, Hooker Furniture Corp. and HMI have approximately 900 employees worldwide.

The statement said the companies' existing ERP operating systems and sales forces will remain in place and operate separately. "While there will be no merger of operations or change in customer-facing services, we do see opportunity to improve each company by sharing best practices and looking for ways to work together to lower costs, improve efficiency and grow sales," Toms said.

Ranked among the nation's top 10 largest publicly traded furniture sources based on 2014 shipments to U.S. retailers, Hooker Furniture Corp.'s  casegoods product categories include home entertainment, home office, accent, dining, and bedroom furniture primarily in the upper-medium price points sold under the Hooker Furniture brand.  Hooker's residential upholstered seating product lines include: Bradington-Young, a specialist in upscale motion and stationary leather furniture; Sam Moore Furniture, a specialist in fabric upholstery with an emphasis on cover-to-frame customization; and Hooker Upholstery, which focuses on imported leather upholstered furniture targeted at the upper-medium price-range. The Homeware product line offers direct-to-consumer, customer-assembled, modular upholstered and casegoods products. The H Contract product line supplies upholstered seating and casegoods to upscale senior living facilities.

Home Meridian International is the parent company of five business units including Pulaski Furniture, Samuel Lawrence Furniture, Samuel Lawrence Hospitality, Prime Resources International and Right 2 Home. Sourcing Solutions Group and Right 2 Home also provide customized and proprietary products and services to HMI partners. In addition to its High Point location, HMI has distribution centers on both coasts and Asian operations in China, Vietnam and Malaysia.