Lorenzo International, the vertically-integrated branded retailer and exporter in the region which engages in the design, manufacture, assembly and distribution of conceptualised lifestyle furniture, announced its plan to acquire 49% of home-grown Cheng Meng Furniture Company, which is one of the pioneers in Singapore for interior fitting, furnishing, interior decoration and custom-made furniture.

Cheng Meng Furniture, a reputed brand with over 60 years of tradition, is known to all major hotel developers in Singapore and many others worldwide. Some of the recent hospitality projects include Crockford Tower at Resorts World Sentosa, Intercontinental Hotel in New York, and Intercontinental Resort in Sanya China, amongst many others.

Besides its projects in the hospitality sector, Cheng Meng Furniture has also executed interior renovation projects in offices, theatres, hospitals, financial institutions, departmental stores and various government institutions, both locally and internationally. Cheng Meng Furniture has undertaken interior renovation and supply projects globally in China, USA, United Kingdom, Australia, Japan, Dubai, Hong Kong, Myanmar, Vietnam, Cambodia, India, The Maldives, The Bahamas and many others.

Based in Singapore, Cheng Meng Furniture has its main production bases in both Malaysia and China. Cheng Meng Furniture recorded revenue of $45.2 million for the period ended 31 December 2009 and net earnings after taxation of $3.6 million.

Cheng Meng Furniture will form one of the substantial shareholders of the group after the transaction, with $10.3 million of the consideration in the form of 55.6 million new ordinary shares at $0.185 per Lorenzo share, based on an $0.005 premium above closing price as at 21 October 2010. The acquisition would dilute FY2009 EPS from 0.61 cents to 0.48 cents but increase FY2009 NTA from 15.40 cents to 17.11 cents.