Armstrong Flooring to Sell Wood Flooring Segment
Lancaster, Pa. -- Armstrong Flooring has entered an agreement to sell its wood flooring segment to an affiliate of American Industrial Partners (AIP) for a purchase price of $100 million.
As of October 31, Armstrong Flooring’s wood flooring segment comprised six U.S. manufacturing facilities primarily serving the North American region and approximately 1,700 employees. The transaction is expected to be completed at the end of the fourth quarter of 2018. The net proceeds to the company from the transaction after purchase price adjustments are non-taxable and expected to be $85 to $90 million, which should increase the company’s flexibility to further invest in its growth strategies and other value-enhancing opportunities.
The company said will be no immediate changes in how it works with customers. Armstrong Flooring will continue to offer its full portfolio of products through the completion of the sale and plans to work closely with the new wood flooring company to ensure a seamless transition. They will keep customers updated on changes.
Upon closing of the sale, Armstrong Flooring will intensify its focus on the fastest-growing parts of the flooring industry, including luxury vinyl tile and rigid core, as well as its resilient products including vinyl composition tile and resilient sheet. AIP will gain Armstrong Flooring’s wood flooring product portfolio and existing network of wood floor manufacturing facilities and will own the Bruce brand and all other wood flooring segment brands. To ensure a seamless transition for customers, AIP will have full access to the Armstrong Flooring brand for the sale of wood products for two years after closing.
“Today’s announcement demonstrates our commitment to maximizing shareholder value and focusing our portfolio on profitable growth strategies,” said Don Maier, CEO of Armstrong. “The wood flooring industry has been impacted by changing market dynamics and now is the right time to deepen our focus on LVT and other resilient flooring categories, where we are confident fundamentals remain strong for future growth.”
Rick Hoffman, partner, AIP, added, “Don and I believe this strategic decision empowers both the resilient and wood flooring businesses to better realize their core strengths and pursue strategies for growth, product innovation and quality, and exceptional service to customers. Our companies look forward to working closely with each other to ensure a seamless transition for employees, customers and suppliers.”
For more information, visit www.armstrongflooring.com.