A Delaware bankruptcy judge approved the sale of Armstrong Flooring Inc. to Mountville, Pa.-based AHF Products Inc. and Gordon Bros. Commercial & Industrial of Boston for $107 million in cash and assumption of certain liabilities.
AHF Products specializes in solid and engineered hardwood flooring and wood-look luxury vinyl flooring, while Gordon Bros. is a liquidation and restructuring firm
The binding asset purchase agreement approved July 13 by Judge Mary Walrath was the culmination of Armstrong's Chapter 11 auction process for its North American assets.
In other related auctions, Giant Group will acquire the equity interests in Armstrong's Hong Kong holding company subsidiary, including all associated operations, for $59 million; and Cowes Bay will acquire substantially all of the company's Australian assets for $31 million plus assumption of specified liabilities.
Officials of Lancaster, Pa.-based Armstrong Flooring and certain subsidies had filed for voluntary protection under Chapter 11 on May 9. They cited rising costs and debts of $317.8 million and the need to sell the entire business or its core assets as soon as possible.
AHF Products received bankruptcy court approval to purchase and operate three U.S. manufacturing facilities that produce vinyl flooring products. The acquisition adds facilities in Lancaster and Beech Creek, Pa., and in Kankakee, Ill., bringing the company's U.S. manufacturing footprint to 10 facilities.
AHF Products also has seven wood plants in the U.S. and one engineered hardwood plant in Cambodia for a total of 11 production sites.
Armstrong officials next will pursue an orderly wind down of its Jackson, Miss., and Stillwater, Okla., locations.
The bid from the AHF and Gordon Bros. consortium was the sole binding bid received for substantially all of the North American assets.
AHF Products' officials bought the Armstrong facilities as part of a growth strategy to strengthen the acquirer's position in the resilient flooring market.
Investments in new brands, products and capabilities, both organically and through acquisitions, has fueled growth, according to President and CEO Brian Carson.
"Our strategic acquisitions have been a key driver in expanding both our reach and product offering to provide our customers with industry-leading commercial and residential products, including hardwood, resilient and laminate," Carson said in a news release. "That is, and will continue to be, our strategy moving forward. Our ongoing commitment is to create products that bring more value to our customers, across categories."
Since its inception, AHF Products grew rapidly in both the residential and commercial flooring segments. Company officials point to a broad product offering, manufacturing capabilities and channels of distribution.
"Our stable of top brands allows us to bring our channel partners the right style, value, innovation and marketing to enable them to differentiate themselves and grow market share. We will continue to be a leader and a one-stop-shop for our customers," Carson said.
In addition to expanding AHF Products' domestic footprint, the acquisition adds to the customer base and brings production efficiencies and logistical capabilities. It also provides insulation from volatility around tariffs, duties and high shipping costs while there is a dislocated global supply chain.
In addition to 11 plants, AHF Products has three domestic distribution facilities that serve customers through a multi-channel strategy of dealers, home centers and distributors.