Private-equity-backed Quebec ready-to-assemble furniture maker Bestar Inc. is buying its bigger U.S. rival Bush Industries Inc. in a deal valued at more than US$150-million.
The combined company, to be based in Sherbrooke, Que. – where Lac Megantic, Que-based Bestar, has one of its two production facilities – will have about US$200-million in annual sales and 600 employees, creating a larger player for the expanding online market for basic self-assembly starter furniture. It also breathes new life into a Canadian furniture industry that was hurt by the rapidly rising value of the Canadian dollar and disappearance of big bricks-and-mortar retail customers over the past two decades.
Brossard, Que.-based private-equity firm Novacap invested an undisclosed amount in Bestar for a controlling stake in July, 2017, and is financing the current purchase of Bush, along with fellow Quebec investors Desjardins Capital and the Fonds de solidarité FTQ.
“Bestar has demonstrated that a strong digital strategy is essential to ensure the growth of manufacturing companies. Supporting companies like Bestar in the consumer goods’ industry is at the heart of the Fonds’ mission,” said Janie Béïque, executive vice-president for investments with the Fonds.
Novacap senior partner Frederick Perrault said the combined company’s three manufacturing facilities will “significantly” enhance flexibility, hasten distribution and delivery while allowing the two firms to consolidate production and improve the management team. He said the deal “creates a significant platform on which to capture market” share, with a focus on what he described as a “fast-growing market opportunity” for direct-to-consumer sales online.
Luc Ménard, chief operating officer of Desjardins Capital, said the private-capital arm of the Desjardins Group co-operative is ”proud to support this flagship in its acquisition of its U.S. competitor, Bush Industries. In doing so, Desjardins Capital is helping to maintain a head office and quality jobs in the province of Quebec, in keeping with its mission."
Bestar was founded in 1948 and Jamestown, N.Y.-based Bush in 1959.
Novacap, founded in 1981, is one of Canada’s most established private-equity firms, with $3.6-billion under management.
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