Upper-end upholstery producer Ekornes has signed a letter of intent to acquire fellow Norwegian producer IMG for an undisclosed price.
Ekornes officials said the deal will give the company a new growth platform for upholstered seating at low and medium price points.
"(IMG) has within a few years gained a solid position in international furniture markets with price efficient products, which will add to Ekornes' portfolio of products," said Nils-Fredrik Drablos, CEO of Ekornes.
Founded in 2006, IMG's product development and marketing offices are in Sykkylven, Norway, and its factories are in Vietnam and Thailand.
Drablos said IMG will operate as a separate business unit within Ekornes, and said Nils Gunnar Hjellegjerde, principal shareholder in IMG, will be managing director of the IMG unit.
"Following the acquisition, we have identified substantial synergies in revenues, in addition to economies of scale in purchasing and logistics," Drablos said.
The acquisition is expected to close by May 1.
In the North American market, Ekornes is best known for its Stressless recliners and sofas. Most of its production is in Norway, but the company opened a plant last year in Morganton, N.C.
IMG gets most of its sales in North America and Scandinavia. It has shown in the High Point Market since 2012.