CALHOUN, GA - Flooring giant Mohawk Industries Inc. has entered into a definitive agreement to acquire the IVC Group for approximately $1.2 billion. The Belgium-based IVC manufactures vinyl and laminate flooring products, and has operations in Europe and the United States.
The transaction was announced Jan. 13 and is expected to be completed around the end of the first quarter of 2015, pending customary closing conditions and regulatory approvals. Mohawk said it expects the transaction will be accretive to EPS in the first 12 months.
IVC has sales of approximately $700 million, according to the news release. Founded in 1997 by Filip Balcaen, chairman and primary shareholder, IVC employs approximately 1,300 people worldwide and distributes its products through large retailers, home centers and regional distributors focused on the residential sector. Its products include sheet vinyl flooring, luxury vinyl tile (LVT) and planks, and laminate flooring.
Mohawk (NYSE: MHK) said IVC's products will complement its existing offerings, and will help position the company as a major participant in the growing LVT category and vinyl business. Mohawk Chairman and CEO Jeff Lorberbaum said, "There are many potential synergies between IVC and Mohawk in both Europe and the U.S. Our greatest opportunities are in LVT, which has increased globally around 18% in the past year. IVC is the fastest growing manufacturer of LVT in Europe, and their manufacturing expertise will help start up our new Belgian LVT factory faster. This new plant will allow IVC to further expand their European sales.
"In the U.S., LVT now represents about 5% of the total flooring market, and sales are projected to grow more than 15% annually through the end of the decade," Lorberbaum continued. "Their new LVT plant in Dalton, GA, will be one of the world's largest, most efficient production lines with leading technology and will position us to meet the rapidly growing U.S. market."
He added, "The IVC acquisition strengthens Mohawk's position as a leading global flooring manufacturer and provides a platform for significant future growth."
Mohawk has operations in Australia, Brazil, Canada, China, Europe, India, Malaysia, Mexico, Russia and the United States. Offering carpet, rugs, ceramic tile, laminate, wood, stone and vinyl flooring, the company's brands include: American Olean, Bigelow, Daltile, Durkan, Karastan, Lees, Marazzi, Kerama Marazzi, Mohawk, Pergo, Unilin and Quick-Step.
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