Mohawk to Acquire Wood Flooring Assets
GDA Staff -- Gifts & Dec, July 9, 2007
Floor coverings manufacturer Mohawk Industries has entered into an asset purchase agreement with Columbia Forest Products for wood flooring plants and working capital.
The assets include two pre-finished solid plants and one engineered wood plant in the U.S. and an engineered wood plant in Malaysia. These plants currently represent approximately $180 million of annual sales and have been Mohawk's largest supplier of wood, the company said.
Mohawk said the plants have been losing money for Columbia, but that will turn around once they are integrated into Mohawk's operations; the transaction is expected to close in the third quarter this year.
Mohawk chairman and ceo Jeffrey Lorberbaum said, "These are excellent assets which are operating at about half their potential capacity. Over the next two years we will invest some additional capital to achieve a low cost position in the market. We will continue to support the Columbia brands sold through independent distributors and enhance the product portfolio."
Lorberbaum continued, "The acquisition enables us to fully participate in the $2.4 billion wood flooring market which is anticipated to grow at 6% to 8% long term. In the U.S., Mohawk will now have the number one or two position in the wood, carpet, ceramic, laminate, stone, and rug markets. This is another key element in Mohawk's strategy to offer a total floor covering solution to our customers."
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