ST. LOUIS -- Interco Inc. announced a definitive agreement Monday to sell for $388 million its Ethan Allen Inc. subsidiary to a new company, Green Mountain Holding Corp., formed by senior management of Ethan Allen and other investors.
The sale is part of a restructuring undertaken by Interco last fall to fend off a hostile takeover bid by Cardinal Acquisition Corp., owned by Steven and Mitchell Rales of Washington, D.C.
Besides the Ethan Allen management personnel, other investors in the transaction are led by Castle Harlan Inc. Ethan Allen dealers and the Ethan Allen employees' profit-sharing plan will invest in the transaction, Interco said.
Senior debt is being provided by Chemical Bank and subordinated debt is being provided by Kidder Peabody Group Inc. and Smith Barney Inc.
In addition to the $388 million, Interco will receive rights to purchase up to 8 percent of the common stock of the new corporation during a five-year period. The components of the deal include $357 million in cash, some real estate assets and the assumption by Green Mountain of $23.5 million in existing debt and capitalized leases.
Closing of the transaction is scheduled for June 30.
Harvey Saligman, Interco chief executive officer, said proceeds from the sale of Ethan Allen and previous sales of other Interco holdings will provide more than the $650 million needed for the restructuring of the manufacturing and furniture giant.
