DAN RIVER IN MERGER WITH BIBB
DANVILLE, Va. — Dan River Inc. has agreed to acquire the Bibb Co., a manufacturer of home furnishings textile products, for more than $250 million in cash and stock.
The combined companies will have total sales of approximately $750 million, including $500 million in home fashions, making Dan River one of the largest vertical manufacturers and marketers of bedding products in the U.S. Under terms of the agreement, each Bibb shareholder will be entitled to elect whether to receive $16.50 cash, 0.84615 shares of Dan River Class A common stock, or a combination of cash and stock, for each Bibb share they hold, subject to proration.
The transaction is expected to be completed by September, pending shareholder and regulatory approvals. It is expected to be accretive to earnings per share in 1999 and will be accounted for as a purchase. Dan River will issue approximately 4.3 million Class A shares and fund the cash portion of the acquisition from the combination of a new debt offering and new bank financing.
“The acquisition of Bibb enhances our already strong position in the fashion bedding market,” said Joseph Lanier Jr., chairman and chief executive officer of Dan River, in a statement, “while bringing to Dan River three important business segments that are new to us: the juvenile, health care and hospitality markets.”In addition to home fashions, Dan River also makes woven cotton and cotton blend fabrics for apparel and is a large supplier of men’s dress shirting fabrics.