Geo sofa by David Edward. Photography courtesy of David Edward.
Kimball, a subsidiary of Kimball International, Inc. (KBAL) announced Friday that it has signed a definitive agreement to acquire substantially all the assets and assume certain specified limited liabilities of David Edward headquartered in Baltimore, Maryland. The closing is expected to be completed within the next 30 days, subject to customary closing conditions.
David Edward is a premier designer and manufacturer of contract furniture, sold in the healthcare, corporate, education and premium hospitality markets. David Edward sells primarily in the North American and Middle Eastern markets.
The David Edward name is synonymous with the highest quality upholstery products in the furniture industry. Their products are generally specified by architects and designers, represented through a network of independent representatives, and sold through authorized furniture dealerships. The David Edward product portfolio consists of classic and contemporary designs, focused primarily in the seating, tables and ancillary furniture categories.
In conjunction with the asset acquisition, Kimball will lease the two existing David Edward production facilities in Baltimore and Red Lion, Pennsylvania totaling 235,000 square feet. The company employs approximately 170 highly skilled craftspeople, who are dedicated to preserving a rich heritage built on delivering premium customized solutions for nearly fifty-five years.
“We were inspired by David Edward employees’ commitment to quality and their incredible tailoring skills, which integrates the most technical and architectural aspects of furniture design,” said Mike Wagner, President of Kimball. “We will further invest in David Edward and build their brand by broadening their ancillary furniture portfolio with the goal of making David Edward the premier source of upholstery products for architects and designers. The synergy for Kimball lies in our ability to leverage David Edward’s excess production capacity to expand not just Kimball Health seating, but also our broader seating portfolio while tapping into their expertise to help us raise our level of design detail.”
David Edward will continue to operate independently, selling through their existing network of independent reps and authorized dealers.
“Greg, Kevin and I, are confident we’ve found a buyer that we are strategically aligned with and who is committed to investing in this business for future growth,” stated David Pitts, President of David Edward. “Our family has enjoyed fifty-five great years of building the David Edward brand, and we are excited for our employees and our customers as we enter this next chapter. This partnership will allow investments necessary for David Edward to reach higher levels of competitiveness and growth.”
“David Edward and Kimball International share a culture of caring for employees, customers, and communities, which provides a solid foundation for building long term success together. We look forward to welcoming all David Edward employees to the Kimball International family where, as stated in our Guiding Principles, Our People are the Company,” added Bob Schneider, Chairman of the Board and CEO, Kimball International.
David Edward had annual revenues of approximately $15.0 million in their latest fiscal year ended September 2018. The company will be purchased for $4.85 million, subject to certain post-closing working capital adjustments. We expect the business to be accretive to earnings per share in approximately 24 months and the return on our investment to begin exceeding our cost of capital in approximately 36 months. Impact on Kimball International, Inc. profitability will be immaterial during this turnaround.