Flooring products manufacturer Mohawk Industries Inc (MHK), on Tuesday agreed to buy Belgian sheet vinyl flooring maker IVC Group in a cash and stock deal valued at about $1.2 billion.
Mohawk said the deal expands its position as the leading global flooring company, presents synergies in Europe and the U.S., and provides momentum for future growth.
The deal is expected to close by the end of the first quarter of 2015. Calhoun, Georgia-based Mohawk expects the merger be accretive to earnings in the first twelve months.
IVC Group was founded in 1997 by Filip Balcaen, currently its chairman and primary shareholder. The Group is a major sheet vinyl provider in Europe and the U.S., with operations in these regions. It is also a leading player in the fast growing LVT category and employs about 1,300 people globally. The has sales of about $700 million.
The Group's strength lies in its low cost, state-of-the-art manufacturing model, combined with a broad product offering.
Jeff Lorberbaum, Mohawk's chairman and chief executive officer, said the IVC's expertise would help Mohawk to start up its new Belgian LVT factory faster and enable IVC to expand its European operations.
Lorberbaum also said that in the U.S., LVT now represents about 5 percent of the total flooring market, with sales projected to grow more than 15 percent annually through the end of the decade. Their new flagship LVT plant in Dalton, Georgia is expected to position Mohawk to meet the rapidly growing U.S. market.
Currently, the U.S. market remains Mohawk's primary focus, comprising about 70 percent of business, with expanding positions in Mexico, Europe, Russia, Asia and Australia.
MHK closed Tuesday at $160.11, up $2.35 or 1.49%, on a volume of 1.8 million shares on the NYSE.
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