Flexsteel Industries ( FLXS) said Wednesday that it will acquire DMI Furniture ( DMIF) in a cash deal.

Flexsteel will pay $3.30 a share in cash for DMI, and it will assume $27 million of the company's debt. Including debt, the merger is valued at about $44 million. The transaction, approved unanimously by both companies' boards, should be completed in September. Flexsteel said the acquisition will immediately add to its earnings.

DMI will be operated as an independent business unit of the combined furniture company with its headquarters remaining in Louisville, Ky. The combined company will have annual net sales of about $400 million.

"The combination of our two companies will allow us to capitalize on the strengths of both organizations," Flexsteel's President and Chief Executive Bruce Lauritsen said in a prepared statement. "DMI Furniture distribution, product lines and global sourcing infrastructure will enhance Flexsteel's focus on expanding its product offering, while the financial strength of Flexsteel provides the resources for continued growth of DMI Furniture."

Shares of DMI were recently up 88 cents, or 37%, to $3.26, while shares of Flexsteel were down 9 cents, or 0.5%, to $17.51.