Man Wah Holdings (01999) announced that its indirect wholly-owned subsidiary, Man Wah USA Manufacturing, entered into a share purchase agreement with Gainline Recline Holdings, LLC on December 18, 2025. Under the agreement, Man Wah USA Manufacturing will acquire 100% of the issued share capital of Gainline Recline Intermediate Corp. for a consideration of $32 million.

Concurrently with the closing, the seller provided a repayment letter from a U.S. bank confirming that the total outstanding obligations under the target group's bank financing amounted to $27.9939 million as of the closing date. Following the completion, Man Wah Hong Kong Trading, another indirect wholly-owned subsidiary, extended an interest-free loan of $26.6703 million to the target group to fully settle the bank financing. The remaining $1.3236 million was repaid using the target group's available bank cash reserves.

The total acquisition cost for the target group's business amounts to approximately $58.7 million, inclusive of the debt settled at closing. The transaction was completed on December 18, 2025, with the target company becoming an indirect wholly-owned subsidiary of Man Wah Holdings. Its financial performance, assets, and liabilities will be consolidated into the group's financial statements.

The target group primarily manufactures and trades upholstered furniture in the U.S., operating under two established brands: Southern Motion (founded in 1996, specializing in reclining furniture) and Fusion Furniture (founded in 2009, focusing on stationary furniture). Headquartered in northern Mississippi, the target group boasts a retail distribution network with over 1,000 active customers.

Man Wah expects synergies from cross-selling opportunities, cost efficiencies in raw material procurement, and enhanced manufacturing productivity post-acquisition. The target group operates eight production facilities spanning over 2 million square feet in northern Mississippi.

The board anticipates that the acquisition will not only create operational synergies but also expand the group’s production footprint into the U.S., positioning it to navigate evolving international trade dynamics.