Investors Wondering About Firm's Stake in Armstrong

New York, NY, Aug. 15, 2014 -- Flooring industry analyst Stifel Nicolaus says talk is heating among its clients up that Armstrong World Industries could be broken into separate entities.

However, in its analysis, Stifel said it believes that it's unlikely the flooring business would be spun off anytime soon.

Citing the recent purchase of 16.8% of the company by investment firm ValueAct, Stifel said, "the breakup thesis has once again become popular" among its client investors.

"The earnings strength of the ceilings business and the generally poorer performances from flooring are no doubt driving this thesis," Stifel says.

Stifel noted that when Armstrong emerged from its asbestos related Chapter 11 in 2006, the plan was to split the company into two pieces that most likely would have had the ceilings (building products) business sold to private equity in a leveraged buyout and the flooring assets acquired by a strategic buyer.

"Not long after hiring an investment bank to pursue this strategy, the LBO window closed, followed by the Great Recession which all but killed this possible outcome," Stifel said.

Stifel walks through a sum of the parts analysis and concludes that if the flooring business were to be spun off, it likely wouldn't happen soon "due to the fact that the wood business is likely to contribute the primary EBITDA growth in the next 18 months due to the margin issues there in 2013 and 2014."

Stifel has a "hold" rating on Armstrong stock.



Other Archived Articles

Duncan Appointed President of Mannington's Residential Business   Full Article
Salem, NJ, Oct. 3, 2014 -- Mannington Mills announced today that Ed Duncan will replace Kim Holm, who is retiring, as president of Mannington’s Residential Business.

Services Sector Growth Slows in September   Full Article
Washington, DC, Oct. 3, 2014 -- The services sector of the economy grew at a slower pace in September, according to the Institute for Supply Management.

CRI Annual Meeting Set Nov. 12   Full Article
Dalton, GA, Oct. 3, 2014 -- The Carpet and Rug Institute's 2014 Annual Membership Meeting will be held Nov. 12.

Unemployment at Six-Year Low in September   Full Article
Washington, DC, Oct. 3, 2014 -- The unemployment rate fell to 5.9% in September as the economy created 248,000 jobs, according to the Labor Department.

Foreclosure Rate Lowest Since 2007   Full Article
New York, NY, Oct. 3, 2014 -- The foreclosure rate edged up 1.1% in August compared to July, according to CoreLogic's National Foreclosure Report.

CRI President Yarbrough Goes to Washington   Full Article
Dalton, GA, Oct. 3, 2014 -- Carpet and Rug Institute President Joe W. Yarbrough traveled to Washington, D.C. Sept. 17-18 for two days of back-to-back meetings with congressional representatives.

Dover Rug & Home a Finalist in Association Awards   Full Article
Cambridge, MA, Oct. 3, 2014 -- Dover Rug & Home said it has been named a Family Business Association (FBA) Awards finalist in the category of Fourth Generation Businesses.

Factory Orders Fall on Fewer Aircraft   Full Article
Washington, DC, Oct. 2, 2014 -- Factory orders fell in August on weakness in the aircraft sector, according to the U.S. Census Bureau.

Jobless Applications Fall Last Week   Full Article
Washington, DC, Oct. 2, 2014 -- Initial applications for unemployment benefits unexpectedly fell last week, according to the Labor Department.

National Floorcovering Alliance Elects Officers   Full Article
Maui, Hawaii, Oct. 2, 2014 -- The National Floorcovering Alliance (NFA) met this week in Maui, Hawaii for its annual fall meeting and elected a new slate of officers who will take office beginning in 2015.

Planned Job Cuts Hit 14-Year Low   Full Article
Chicago, IL, Oct. 2, 2014 -- The number of planned layoffs declined to a 14-year low in September, according to tracking firm Challenger, Gray & Christmas.

Metroflor's Aspecta Begins Reclamation Program   Full Article
Norwalk, CT, Oct. 2, 2014 -- Aspecta, Metroflor's new LVT brand, said it has launched a free one-call reclamation service called Revise.

HPS Schönox Makes Two Executive Appointments   Full Article
Florence, AL, Oct. 2, 2014 -- Doug Young has been named executive vice president at HPS Schönox.

Kokoszka To Help Dixie Integrate Burtco   Full Article
Chattanooga, TN, Oct. 1, 2014 -- The Dixie Group said it has hired former Burtco Enterprises CEO Robert E. Kokoszka to assist Dixie in integrating his former company.

Manufacturing Continues To Expand in September   Full Article
Washington, DC, Oct. 1, 2014 -- Manufacturing expanded at slower pace in September, according to the Institute for Supply Management.

Construction Spending Declines in August   Full Article
Washington, DC, Oct. 1, 2014 -- U.S. construction spending fell 0.8% in August to a seasonally adjusted annual rate of $961.0 billion, according to the Commerce Department.

Private Employers Add 213,000 Jobs in September   Full Article
Roseland, NJ, Oct. 1, 2014 -- Private employers added 213,000 jobs in September, according to the ADP Employment Report.

Mortgage Application Volume Falls Last Week   Full Article
Washington, DC, Oct. 1, 2014 -- Mortgage application volume last week fell 0.2% on a seasonally adjusted basis, according to the Mortgage Bankers Association.

Cersaie Attendance Tops 100,000 Visits   Full Article
Bologna, Italy, Oct. 1, 2014 -- Attendance at Cersaie 2014 once again topped 100,000 visits, organizers said.

Fannie, Freddie Foreclosure Preventions Decline   Full Article
Washington, DC, Sept. 30, 2014 -- Approximately 80,000 foreclosure prevention actions were completed by Fannie Mae and Freddie Mac in the second quarter.