AHF Only Non-Liquidating Buyer for Armstrong's North American Assets

Lancaster, PA, July 14, 2022-AHF Products was the only non-liquidation buyer in the final stages of the Armstrong Flooring banktruptcy sale of the North American assets. “No other company wanted to buy bankrupt Armstrong Flooring Inc. and keep it going, Armstrong Flooring disclosed in court documents," reports Lancaster Online.

“The bid, auction and sale process was held privately under bankruptcy court rules, but recent documents filed in the case provide insight into how the deal was made. 

“In six months of marketing, a total of 127 interested parties ‘explored participation’ in the sale process, and 87 interested parties entered into nondisclosure agreements with Armstrong Flooring to be able to get a closer look at its financials in a virtual data room.

“But when it came down to submitting a qualified bid, just two companies working together wanted to buy Lancaster County’s iconic flooring business, according to Jeffrey Lewis, the financial advisor from Houlihan Lokey Capital Inc. who helped craft the $107 million deal that saved Armstrong Flooring’s Lancaster city, Beech Creek Township (Clinton County) and Kankakee (Illinois) plants.

“In court documents filed this week, Lewis revealed that those two companies, AHF Products Inc. in a consortium with Gordon Brothers Industrial & Commercial, were set to buy Armstrong for $84 million when Armstrong Flooring’s lenders proposed to enter bidding to encourage higher selling price. The lenders had sought to close down the company prior to bankruptcy. Their participation had been a looming possibility since a bankruptcy loan was approved in May. 

“Armstrong Flooring extended the bid deadline to June 23 from June 14 to allow ‘several’ potential bidders more time to complete due diligence. 

“All told there were seven bids for certain North American factories and headquarters and just two bids were going-concern bids: the AHF-Gordon Brothers consortium and another bidder who was disqualified because they only submitted a nonbinding letter of intent. Going concern means the bidder intended to keep the facility operating.”

There were almost 550 court dockets in the bankruptcy process, due in part, to the number of parties who had a say in the outcome.

In a FloorDaily podcast interview with Brian Carson, CEO of AHF Products, Carson stated that he has the right to use the Armstrong Brand as one of the 14 brands AHF owns. The company will also continue with many of Armstrong’s most successful sub-brands, including Imperial Excelon, Diamond 10 and Medintech. 

In addition, Armstrong's popular Stratamax product that was made in the Stillwater factory, which was not a part of AHF’s acquisition, will transition to a different version of the product with many of the same features and benefits, producing in the Lancaster facility. It will relocate cutting machinery from Stillwater to Lancaster. The company is seeking ways to expand the volume and reach of the plants and machinery acquired as part of the purchase. 

The acquisition is expected to close July 22, according to Carson.

Listen to the interview with Brian Carson and Jennifer Zimmerman for more, here.

Related Topics:Armstrong Flooring, AHF Products