Anthony Scali sells half stake in $77 million deal

nickscaliNick Scali managing director Anthony Scali has sold half his shares in his family’s namesake business to Chinese manufacturer KUKA holdings for $77.2 million in a deal that the business says will strengthen relations with a major supplier.

Scali reduced his stake in Nick Scali to 13.63 per cent of the business, while Jason Furniture, which goes by KUKA, will hold an identical 13.63 per cent stake of 11.04 million shares.

The move has raised questions about the Scali family’s ongoing role in the business, although Scali himself said that he was still committed.

The company made news of the deal public on Tuesday evening, saying in an ASX release that KUKA represented a strategic shareholder for the company, outlining its hope that KUKA could assist the company to “realise its growth strategies”.

“Nick Scali Limited has been an important part of me for all my working life and I believe it continues to have great prospects,” Scali, who sold the stake at $7.00 per share, said in a statement on Tuesday evening.

“I am as committed to the company as ever and I will be maintaining my remaining shareholding.

“I am looking forward to developing even stronger relationships with suppliers and to pursuing the growth opportunities for the benefit of all stakeholders.”

KUKA is a Shanghai Stock Exchange listed manufacturer of soft furniture products and has been a supplier to Nick Scali for a decade, with a market capitalisation of around $6 billion.

The Chinese business has 120 customers in over 70 countries and had annual sales of $1.4 billion in 2017.

Nick Scali had left the door open to further international expansion last month when it booked a 15 per cent increase in its interim net profit, although much of its focus was thought to be on the New Zealand market, where it has a fledgling operation.

The deal is subject to approval by relevant Chinese Government departments.

Nick Scali reiterated its profit guidance on Tuesday night, saying that it expects net profit growth of between 5-10 per cent for FY18.

UPDATED – 19:55 AEDT

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