Calhoun, Ga.—Mohawk Industries has agreed to acquire the Godfrey Hirst Group, which provides broadloom, modular carpet and hard surface products for both residential and commercial applications for markets in Australia and New Zealand.
For Mohawk, which presently operates a comprehensive warehouse and sales network in Australia and New Zealand, the deal further extends its global position and paves the way for the company to distribute Godfrey Hirst’s wood, laminate, LVT, vinyl and carpet products. Godfrey Hirst generated revenues of approximately $334 million in its most recent fiscal year, which ended June 30, 2017.
The transaction is expected to be completed during the first half of 2018, pending customary closing conditions and regulatory approvals.
“Godfrey Hirst’s marketing, manufacturing and distribution leadership will complement our current hard surface distribution and strengthen our portfolio,” said Jeff Lorberbaum, Mohawk’s chairman and CEO. “We will leverage our global flooring resources and talent to support Godfrey Hirst’s outstanding management and accelerate their growth strategies.”
Mohawk’s strategy in Australia and New Zealand, according to Lorberbaum, is to build a leading position in flooring. “Mohawk is using its strong management team and balance sheet to increase its participation in the global flooring market. With Godfrey Hirst, Mohawk will become the leader in flooring products in both Australia and New Zealand with a platform for significant growth.”
Established in 1865, Godfrey Hirst has been owned and operated by the McKendrick family for the last 50 years and will continue to be led by R.G. (Kim) McKendrick, the CEO and chairman.
“This a great opportunity for Godfrey Hirst, our employees, customers and suppliers,” McKendrick said. “Mohawk and Godfrey Hirst share a long history as flooring industry leaders.”
Brian Carson, president of flooring-North America, Mohawk, said that with the impending acquisition, Mohawk’s family of brands has gained greater momentum. “Godfrey Hirst manufactures outstanding products to satisfy all channels and price points and is a perfect complement to Mohawk’s business.”
Carson noted that as a worldwide leader in flooring, Mohawk strives to create innovative products that improve the way people live and work. This move “will allow us to expand upon our worldwide mission to make people’s lives better through innovative products.”
Lancaster, Pa.—Armstrong Flooring has closed on the previously announced definitive asset purchase agreement to acquire the Vinyl Composition Tile (VCT) business of Mannington Mills.
“We are pleased to close on this strategic acquisition and strengthen our footprint in the well-structured VCT category,” said Don Maier, chief executive officer. “This acquisition remains on track to drive accretive benefits to earnings in 2018 and marks an exciting step in our multi-pronged approach to achieve our medium-term goals. We look forward to providing customers with an expanded inventory selection backed by our expertise in VCT, as well as exceptional service from our strong distribution network.”
Armstrong Flooring intends to use its existing plant and distribution networks to accommodate the additional VCT volume from the acquisition in order to drive top and bottom line benefits through increased scale and capacity utilization.
Stafford, Texas—Redi Carpet recently acquired Philadelphia-based CMQ Floor Covering which will expand Redi Carpet’s footprint to 25 different locations in 15 separate states.
“The acquisition is in alignment with our nationwide growth strategy,” said Brian Caress, CEO, Redi Carpet. “It will further elevate Redi Carpet’s position as the largest multi-family flooring provider in the country.”
Redi Carpet will now offer its innovative products and unique value-added services to customers previously served by CMQ. In addition to having a large in-stock selection of products, Redi Carpet offers online account services, electronic invoicing and Redi-Link proprietary diagramming software to its customers.
“We are excited for the opportunity to expand into one of the premier multifamily housing markets in the country,” said Mike Mosley, senior vice president of Redi Carpet. “In addition to the Philadelphia metro area, this new branch location allows us to serve customers in Southern New Jersey and the greater Delaware Valley. CMQ has built a reputation for service in the local market and we believe this is a natural fit. Our first guiding principle is being customer obsessive, so we’re intent on raising the level of service to onsite property managers in the region.”
Stafford, Texas—Redi Carpet has acquired Got You Floored’s Wilmington, N.C. location. The acquisition marks the 24th Redi Carpet branch in the country.
The acquisition makes another strong contribution to Redi Carpet’s overall growth strategy. “It represents a tremendous opportunity for Redi Carpet as we continue to grow our company so that we are properly positioned to support all of our customer’s nationally,” said Brian Caress, Redi Carpet’s co-president.
The acquisition has also expanded Redi’s reach in the North Carolina market. Currently, Redi Carpet branches are located in Charlotte, Raleigh, and Greensboro/Winston-Salem. “After serving the Wilmington area from Raleigh for several years, we are excited for the opportunity to open a local branch,” said Mike Mosley, senior vice president of Redi Carpet. “This new location completes our coverage of North Carolina and allows us to serve customers in coastal South Carolina as well. The acquisition of Got You Floored’s Wilmington business allows us to welcome some great employees to the Redi Carpet team and build on their success. Our first guiding principle is being customer obsessive, so we’re intent on raising the level of service to onsite property managers in the region.”
Redi Carpet’s innovative product line and unique value-added resources will now be available to customers previously served by Got You Floored. In addition to having a large in-stock selection of products, Redi Carpet offers online account services, electronic invoicing and Redi-Link proprietary diagramming software to its customers.
Northlake, Ill.—Empire Today on Nov. 18 announced that an affiliate of H.I.G. Capital, a leading global investment firm, had acquired it in order to support and help drive the company’s growth initiatives. Earlier this year FCNews reported Mercury Capital LP, the investment firm that has owned Empire for 17 years, had been exploring a sale (FCNews, June 6/13).
Empire is the largest in-home sales flooring company and one of the largest specialty flooring providers in America. Empire currently sells to consumers looking for “Flooring Made Easy” in 68 markets, including the 30 largest markets in the U.S. Empire also sells fully installed flooring to businesses, property managers, restoration companies and other organizations. Empire recently expanded its products and services through a growing number of store-within-a-store JCPenney locations.
“H.I.G. has spent a great deal of time with our team and the business, is entirely supportive of our vision to become America’s first and best choice for installed flooring, and has made this investment to help us achieve that goal,” said Keith Weinberger, CEO of Empire Today. “This transaction, and the exciting future we see, is the result of the dedication and efforts of our employees and contractors who make getting beautiful new floors easy for our customers across the country. Empire is committed to continuing to improve our customers’ experiences, and expanding our products and services into new geographic markets.”
Brian Schwartz, executive managing director, H.I.G. Capital, said, “Empire is a market leader with a compelling customer value proposition, a unique business model, an incredible brand and significant growth prospects. We see tremendous opportunities in the business and look forward to supporting Keith and the entire Empire team.”
The acquisition also includes Luna Carpet, which was purchased by Empire for an undisclosed sum in January 2012. Both brands have continued as separate operations.
Miami-based H.I.G. has more than $20 billion in assets under management.
Neither Empire Today nor H.I.G. Capital would comment beyond what was in the press release.
USFloors is regarded as the leading innovator of wood plastic composite (WPC) flooring, featuring its patented COREtec, as well as cork, bamboo and hardwood products. Shaw already has a strong position in WPC with its Floorte line, and is a leader in hardwood flooring with its Epic and Anderson brands.
Vance Bell, chairman and CEO, Shaw Industries, said the two companies share similar values and focus on innovation, style and design, and sustainability leadership. “Combining USFloors—the fastest growing company in the fastest growing segment of the flooring business—with Shaw’s LVT position creates a significant opportunity for the combined companies.”
Piet Dossche, CEO of USFloors, told FCNews, “The good thing here is the innovation and the branding will be supported by the incredible logistics and distribution freight system that Shaw has available. We’re combining their operational excellence with the creativity and innovation that USFloors brings to market. It’s a whole new chapter for USFloors.”
Dossche said the transaction was consummated within three months. The deal, terms of which were not released, should be finalized in the fourth quarter pending customary closing conditions and regulatory approvals.
In the interim, retailers are applauding the deal. Sam Roberts, owner of Roberts Carpet and Fine Floors, with multiple locations in the Houston market, called it an “excellent” acquisition for Shaw. “COREtec is the gem in the deal. Their visuals and patents—combined with their brand new manufacturing facility that is just now coming on line—make them extremely attractive. The impact on all of us will largely be dependent on how Shaw chooses to treat the acquisition. If Shaw keeps the current USFloors sales force and chooses not to significantly augment them with additional salespeople and management—which always equals even more dealers and the resultant smaller margins—then the impact on the retail community might be relatively small. Shaw’s a great company and can be an excellent partner. For retailers, as always, it’s largely about achieving and maintaining a competitive position.”
Steve Weisberg, owner of Crest Flooring in Allentown, Pa., compared the Shaw-USFloors deal to the time when Mannington acquired Amtico, which bolstered Mannington’s LVT business and expanded its global reach. “This category is so important and therefore it was a wise move for the future. Shaw certainly knows what they’re doing.”
Jason McSwain, president of Cincinnati-based McSwain Carpets & Floors, a strategic USFloors partner for 12 years, said the deal has a “high positive impact” for his business. “Nine years ago USFloors became a specialty vendor partner with the NFA (National Floorcovering Alliance) and a core vendor in 2009. It is my belief the NFA has a strong competitive advantage with USFloors, and the executive team at Shaw will support this competitive position with enhancements that Shaw does so well—freight enhancements, marketing support, program execution…all will be strengthened through the combined companies.”
Dossche said that while USFloors is growing fast, at some point it would have to build out that infrastructure. “By joining Shaw all that support and logistics and back office operations is already there, so we can concentrate on product innovation and expanding the customer base. Shaw has a very strong, first-class hard surface sales force. We are going to the market from two different angles to grow our footprint at the retail level. We will continue to brand separately and continue to advertise. We have to differentiate the brands rather than being in one melting pot.”
USFloors is in the process of building a domestic manufacturing facility in Dalton, with an expected opening in spring 2017. The plant was built to produce its WPC core. With Shaw’s LVT plant in Ringgold, Ga., already operational, the companies will be able to work collaboratively. “Overnight we will become vertically integrated,” Dossche explained. “We will together be making a fully integrated process. The opportunities going forward are enormous. We are putting strength with strength and our speed to market will accelerate. We will be a formidable player in the LVT/WPC category.”
The Shaw/USFloors combination comes at a time of exploding growth for the WPC category, which Dossche believes has the potential to be a $1 billon market in a few years.
USFloors, which markets its products under the COREtec, Natural Cork, Natural Bamboo, Navarre and Castle Combe Floor and Wall brands, has distribution centers in Dalton; Augusta, Ga., and Anaheim, Calif. In addition, USFloors has an extensive quality control and logistics presence in Shanghai and an international sales and marketing office in Belgium.
Calhoun, Ga. — Mohawk Industries has completed its acquisition of the IVC Group for $1.2 billion in cash and stock.
IVC is a vinyl and laminate flooring manufacturer with 2014 revenues of approximately $735 million and manufacturing operations in Belgium, Luxembourg and the United States.
LVT now represents about 5% of the U.S. flooring market, with sales projected to grow more than 15% annually through the end of the decade.
Mohawk’s IVC acquisition includes a new LVT manufacturing facility in Dalton, which is in the initial stages of production. The facility features one of the world’s largest, most efficient production lines and will position the business to support the rapidly growing demand for LVT in residential and commercial channels.
ST. LOUIS — E.J. Welch Company Inc. has acquired the Merle B. Smith Company of Burr Ridge, Ill.
Incorporated in 1971, MBS Co. grew rapidly to become one of the Chicago area’s largest hardwood flooring distributors. Owners Merle B. Smith, age 84, and Dominic J. Reda, age 69, decided to retire.
Michael Welch said his firm is keeping the Merle B. Smith Co. name indefinitely and retaining all its employees. Welch is a wholesale distributor serving the flooring trade since 1962. It has a product portfolio of flooring brands, installation products and tools and accessories.
E.J. Welch Company is a value added wholesale distributor serving the flooring trade since 1962.
Boca Raton, Fla. — QEP Co. said it has completed the acquisition of laminate maker Faus Group. Faus USA manufactures and distributes laminate flooring under the Fausfloor brand.
Faus USA operates out of a 380,000 square foot manufacturing and distribution facility located on over 78 acres in Calhoun, Ga. “The acquisition of Faus USA and its superior manufacturing facility in Calhoun, Ga., will allow the company to offer its customers a line of high end laminate products, that complement the Harris Wood line of engineered wood products as alternatives to existing imported products,” said QEP Chairman Lewis Gould.