Clearview Cap Puts Furniture Deal to Bed –

Old Greenwich, Conn.-based Clearview Capital LLC last month completed a $36 million purchase of American Furniture Manufacturing Inc., a producer of promotional upholstered residential furniture.

With the close of the deal on September 21, Clearview controls 80% of the company, which is based in Pontotoc, Miss. The deal was financed with equity from Clearview Capital, senior debt provided by the New York office of LaSalle Business Credit Inc., and mezzanine debt provided by Peninsula Capital Partners LLC.

James Andersen, co-managing director at Clearview, said that although it is difficult to fund almost any deal in today’s market, this deal found financing due to its “high quality.”

As a testament to the lenders confidence in the company, Andersen noted, “We closed on the 21st. We expected to close a week earlier but we couldn’t reach our attorneys in New York . . . obviously things got slowed up. However we didn’t have our lending sources do anything but stay full steam ahead.”

American Furniture was founded in 1988 by Gerald Washington, who has been in the furniture business for 45 years. “Washington, the president of the company, knew exactly what he wanted to do and he’s simply gone out and executed the right strategy,” Andersen said.

That strategy of selling low-end upholstered furniture through regional independents nationwide and shipping the product within 48 hours of ordering has led the company to substantial growth. American Furniture is currently at a run rate of approximately $100 million in sales annually.

Andersen said the company is seeing most of its growth internally and Clearview will provide whatever capital is needed to continue that growth. “Really, we’re talking about building additional plants,” he said. “The company is growing so fast we don’t really need to make acquisitions to grow.”

The company’s sales for the third quarter are up 17% from those of Q3 2000. “We’ve shown no slowdown whatsoever in the last three to four weeks, which is rare for most companies,” said Andersen. “We’re very excited about this company. They’ve got the right management team. They are motivated well, and we’re looking for big things.”

Clearview Capital, which has invested $40 million in three investments since its founding in November 1999, is in the process of raising its first fund. The vehicle, which has a target of $75 million, is expected to hold a $40 million first close in approximately one month.

Clearview’s first investment, Reno, Nev.-based VIA Inc. is also in the furniture business. Andersen said that the firm is not trying to specialize in furniture, and in fact due to the vastly different markets served by the companies, they are hardly the same type of businesses. VIA, which was purchased in June 2000, manufactures contract office furniture. The firm’s second investment, which was completed in March 2001, was a co-investment with Whitney & Co. in Compression Polymers Group, which makes flat plastic sheets out of polyethylene, polypropylene, and PVC.