Lancaster, Pa. — Armstrong Flooring Inc. closed on its deal to buy the vinyl composition tile (VCT) business of Mannington Mills for $36 million as part of a strategic acquisition to strengthen its position in the commercial-grade flooring category.
Based in Lancaster, Armstrong entered an asset purchase agreement with Mannington for equipment and intellectual property in May. Armstrong will use one of its 17 existing plants and distribution networks to produce and sell the VCT under its brand for high-traffic areas, such as schools and stores.
The sale of the flooring line by Salem City, N.J.-based Mannington resulted in 80 layoffs, including 40 workers at the manufacturing plant in nearby Mannington Township, and 40 salaried employees.
Mannington started the VCT line in 1990 but sales had fallen off. Officials of the privately held, family-owned company said the decision to sell the business unit is in line with its long-term strategy to invest in high-growth, high-profit markets, such as luxury vinyl tile.
Armstrong officials said VCT is one of their more profitable categories thanks to a broad product portfolio and deep customer relationships. During a May conference about results for the first quarter, Armstrong President and CEO Donald Maier said: "VCT is a very important product for our commercial customers. It is a significant category within the hard surface flooring industry. The addition of this business will build upon our strong history and deep expertise in VCT. We'll be able to increase our VCT volume and make more efficient use of our production capacity and go-to-market structure."
Armstrong posted net sales of $265.2 million in the first quarter, which is down compared to $284.4 million for the same period of 2016. A decline in the wood segment was the primary reason. Net sales in the wood flooring segment were $104.7 million as compared to $120.5 million for the prior year with the decline driven by lower volumes.