Leggett & Platt Acquires RHC Spacemaster

Leggett & Platt Inc. (Carthage, Mo.) has bought bankrupt fixture manufacturing conglomerate RHC Spacemaster (Melrose Park, Ill.).

In offering about $46 million, Leggett & Platt topped the previously reported acquisition bid made by Lozier Corp. (Omaha, Neb.).

By acquiring RHC, whose wall systems and garment racks are used in Wal-Mart, Gap and other stores, Leggett & Platt has expanded its business, though a company spokesman said it has gained no new customers.

RHC, one of the industry's largest fixture manufacturers, is said to have suffered as retailers scaled back new store openings and postponed refurbishing existing sites. It also suffered from the 2002 bankruptcy filing of Kmart Corp. (Troy, Mich.), which had been a major customer.

Leggett & Platt said four of the top 10 store fixture manufacturers have filed for bankruptcy protection over the past two years. RHC filed in February in a Chicago court after its revenues fell from a peak of $243 million in 2000 to $59 million in the first five months of 2003, according to Leggett & Platt's press release. “In contrast,” said the spokesman, “Leggett's financial position is notably sound, and the company is well-situated to benefit from the eventual increase in store fixture demand.” Leggett said its initial total investment should decrease by about $18 million because of reductions in excess working capital. It also said its incremental revenue should be $100-120 million per year.

RHC is one of the five largest manufacturers in the industry, and produces a broad range of metal and wood store fixtures. Products include wall systems, showcase frames, garment racks, gondolas, brackets, checkout stands, display tables and other fixtures. Customers include Wal-Mart, Gap, Lowe's, Sears, Kohl's, JCPenney and Target, with the top 20 customers representing 73 percent of 2002 revenues. The company manufactures and distributes from eight primary production facilities and five warehouse and distribution facilities. Leggett said it expects to continue operating several of these facilities, but will consolidate some operations into existing Leggett facilities.