Interface Acquires Chatham From CMI

May 10, 2000

High Point – Clinton Mills Inc. announced on May 2 that it has sold the Chatham furniture fabrics assets to Interface, Inc. for $25 million in cash. Interface, based in Atlanta, Ga., is a billion dollar international company, which produces contract textiles, industrial carpet, chemicals and architectural products. It is the third time in 12 years that Chatham has been sold. Sources allege that CMI will use the capital from the sale to restructure its greige goods operations.

The acquisition of will help Interface place more products in the office. Currently, Interface is a prominent player in sales of office carpet, especially carpet tiles, a market in which it reportedly owns a 60% share. Chatham reportedly owns a 30% share of the North American market for office chair seating fabrics. "The synergies are obvious," said Jeff Irwin, Chatham's vice president of furniture fabrics. "The product lines are complementary."

Under new ownership, Chatham's furniture fabrics branch becomes Chatham Inc., where 1,100 of CMI's 1,450 employees will be employed. The rest will remain with Chatham, which will continue operating in Elkin, Ga.

Amidst the acquistion, Derrell Rice has been promoted from executive vice president of marketing and sales to president of Chatham Inc. He will report to Brian Demoura, who is president of the Interface Fabrics Group.

"One of the exciting parts of this acquisition," said Rice, "is that Interface plans to let Chatham continue the way we interact with the markeplace today. At the same time we'll derive a lot infrastructural support from Interface. Our intention is to provide a very smooth transition and then improve as we go forward.''

Rice said he expects both companies to improve. "The reason they bought us is that we do some things very well that they don't do. They do vertical surface, panel fabrics strongly; conversely they're not terribly strong in contract seating market.

"Interface has a broad range of expertise in recycling strategies, upholstery fabric manufacturing and a global perspective to provide solutions for our marketplace," he said. "So there will be a significant number of benefits for Chatham as we learn from Interface how to be a better a supplier to our customers.''

According to sources within Chatham, Interface is already discussing investing $5-10 million in Chatham. "We are ordering a number of things in the plant," Irwin confirmed. "Additional loom capacity has been ordered. We are also looking at several areas of the plant where we have some capacity bottlenecks and do anticipate continued, substantial capital investment.''

"Some of the investments include information technology and our whole e-commerce infrastructure," said Rice.

No Chatham employees have lost jobs as a result of the acquisition. "Interface has an excellent track record of acquiring companies and not losing the essence of why they've bought them - keeping the unique characteristics of the company or the brand," Irwin said.

Interface also owns Toltec, Stevens Linen and Guilford of Maine U.S.-based fabric mills and Camborne Fabrics in the U.K.

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