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Mohawk closes on Pergo purchase

By Steven Feldman

Volume 26/Number 17; January 7/14, 2013

DALLAS—On Jan. 10 Mohawk Industries closed its $150 million purchase
 of Pergo. The proposed deal was announced in late October.

“We are pleased to expand 
our laminate offering with the 
highly regarded Pergo brand and 
designs that complement our
 existing laminate products,” said 
Jeff Lorberbaum, chairman and 
CEO, in a statement. “The acqui
sition aligns Unilin’s strength
 with specialty flooring retailers 
with Pergo’s depth in the DIY channel. In addition, Pergo enhances our geographic position and provides a platform to further leverage Unilin’s patented technologies.”

Matt Kahny, president of Unilin, sat down with FCNews last month to discuss the mindset behind the purchase. First and foremost was the power of the Pergo brand. “We believe that within the flooring industry, the Pergo brand continues to be one of the strongest with consumers. So the opportunity to compete in the flooring arena with another brand name was very appealing.”

Kahny also noted the complementary channel approach Lorberbaum cited. “We are strong in specialty retail with the Mohawk and Quick•Step brands, and Pergo is strong in the home center channel, so the two complemented each other in terms of overall business.”

That’s not to say consumers won’t find Pergo in the specialty retail channel. “We will evaluate that [in the coming months],” he said. “We see the brand has value. Finding the best way to work with that brand is what we will be spending a lot of time on.”

Kahny also noted how Mohawk and Pergo have many similarities with their respective approaches to the market. He specifically cited product differentiation, innovation and technology. He said intellectual property is a very important part of the Unilin business. “Pergo has been aggressive in patenting new technology, so we thought that was a good fit. For example, it has some interesting technology as it relates to the durability in the laminate finish.”

For now, Kahny concluded, Mohawk will be utilizing both its Thomasville, N.C., facility and Pergo’s Garner, N.C., facility to produce laminate flooring. “We see both plants as an important part of our overall strategy. We found they do things very well that we can learn from.”

Pergo generated $320 million in sales last year of which more than 50% was in the U.S.