Hong Kong — Sinomax will strengthen its US presence by buying a further 14.8% for $2.5m of Dormeo, a bedding and mattress maker, taking its stake to 52% by the end of April.
Sinomax previously bought 36.5% of Dormeo for $10m in September 2015.
Delaware-based Dormeo will become an indirect non-wholly owned subsidiary of Sinomax, the firm said, SMSA, a wholly owned subsidiary of Switzerland-based Studio Moderna, will own the balance. Sinomax has been supplying foam to SMSA "in its ordinary course of business," Sinomax said in a statement to the Hong Kong Stock Exchange.
Dormeo made a pre-tax loss of $4.69m in 2015, it had assets for $9.89m in 2015 and liabilities of $7.3m.
Studio Moderna, and Sinomax have also entered a purchase agreement which will see Studio Moderna take product from Sinomax at either market rate or on a cost-plus basis up to a maximum amount of $30m/year.
The purchase gives Sinomax access to Dormeo's Octaspring PU Spring technology which was launched in the US in 2012.
Sinomax added that the purchase builds on its international network, and will make it less expensive to serve the US customer and a major customer. Sinomax announced in February that it was building a production facility in Tennessee to help grow its business in the US where customer were increasingly demanding US-made products.