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Engineered Floors poised to purchase Beaulieu Group

October 9/16, 2017: Volume 32, Issue 9

By Ken Ryan

 

Screen Shot 2017-10-17 at 9.27.53 AMDalton–Engineered Floors’ agreement to purchase substantially all operating assets of Beaulieu Group—a deal pending bankruptcy court approval—would make EF a dominant No. 3 player in the carpet segment, a billion-dollar player overall, trailing only industry titans Shaw and Mohawk.

If approved, which is expected, the deal could be consummated in November.

Back on Sept. 20, Engineered Floors and Beaulieu Group had agreed to terms in a letter of intent. (Beaulieu Canada, which is not a subsidiary of Beaulieu Group, is not part of this deal.) The companies have now concluded those negotiations and executed a definitive agreement.

Engineered Floors did not divulge many details of what its plans are post-acquisition, other than to say it intends to operate the assets going forward and continue to grow the residential and commercial businesses. “This will be good for both our business and the community,” said Bob Shaw, chairman and CEO, Engineered Floors.

When asked specifically if Engineered Floors would retain the Beaulieu brand, or whether it would bring back the Coronet name—as has been speculated—a company spokesman said there would be no comment beyond the initial press release.

Fast-track growth
Since Bob Shaw founded Engineered Floors in 2009, the company has quickly grown. Its 2016 sales were $659 million and it has a strong position in the multi-family builder market; it serves the residential sector through distribution under the Dream Weaver brand. In April 2016, Engineered Floors acquired J+J Flooring Group, a commercial carpet specialist with sales of approximately $140 million. Last summer the company launched its Pentz Main Street division.

Screen Shot 2017-10-17 at 9.28.02 AMSince its purchase J+J Flooring has operated as an independent division under Engineered Floors. There is speculation that Beaulieu could also be operated as its own entity under the Engineered Floors flag. James Lesslie, executive vice president of sales and marketing, came over from Beaulieu in 2009 when the company was started; he was chief operating officer at Beaulieu when he left. Beaulieu’s annual sales are estimated to be approximately $350 million. Combined with Engineered Floors, the entity would exceed $1 billion in 2016 sales.

Since founding Engineered Floors, Shaw has created thousands of jobs in Whitfield County. Today the company employs 3,000, with more to be added as manufacturing facilities come online. One well-placed industry executive said Bob Shaw contacted Beaulieu to obtain a list of all the Beaulieu employees who had been laid off in the past six months. Engineered Floors did not comment on a question regarding Beaulieu employees.

Beaulieu filed for Chapter 11 bankruptcy on July 17. At the time, the company believed the process of reorganization would position it for future success. “Beaulieu family members and our board of managers believe pursuing a restructuring through Chapter 11 is the best path forward at this time,” Michael Pollard, president of Beaulieu Group, said at the time. “We have evaluated alternatives to address Beaulieu’s capital structure, and we believe restructuring through the Chapter 11 process will best position all of Beaulieu Group LLC’s businesses for future success.”

Founded in 1978, Beaulieu America, which until recently was the No. 3 carpet mill, employs upwards of 2,500 associates in more than 12 facilities and offices across North America. In addition to the Beaulieu brand, the company manufactures medium-priced commercial carpet under the Cambridge label, high-end specified carpet under the Bolyü label, and needlepunch floor covering products sold through Murray Fabrics and the company’s surfaces divisions.