Armstrong Flooring announced that it has completed the previously disclosed sale of its Wood Flooring segment to an affiliate of American Industrial Partners. Proceeds from the sale were approximately $90 million, net of closing costs, transaction fees and taxes. The transaction is subject to a customary post-closing working capital adjustment process, which is expected to be completed in the first quarter of 2019.
According to Armstrong Flooring, the completion of the sale permits to intensify its focus on the fastest-growing parts of the flooring market, including Luxury Vinyl Tile and rigid core, as well as a wide range of resilient categories such as Vinyl Composition Tile, resilient sheet and its Diamond 10® line of products. This exclusive focus on resilient flooring is expected to strengthen the company’s product and end market mix while improving its ability to innovate and enhance the profitability of its portfolio.
Don Maier, Chief Executive Officer, commented, “We are excited to enter 2019 with an exclusive focus on resilient flooring, which improves the profitability of our award-winning product portfolio. This transaction is immediately accretive to our EBITDA margin and together with the right-sizing of our cost structure unlocks additional value for Armstrong Flooring’s shareholders. This divestiture positions us well for the future, as we are now able to concentrate our efforts on attractive and growing resilient categories. Additional financial information regarding the transaction will be available to shareholders after the New Year.”
The transaction is valued at approximately 7.2 times the Wood Flooring segment’s trailing twelve month Adjusted EBITDA. As of October 31, 2018 Armstrong Flooring’s Wood Flooring segment comprised six U.S. manufacturing facilities primarily serving the North American region and approximately 1,700 employees.