Mannington to Sell VCT Business to Armstrong

Salem, NJ, May 8, 2017–-Mannington Mills has signed an agreement to sell its vinyl composition tile (VCT) business to Armstrong Flooring for $36 million.

The transaction is expected to close in the second quarter of 2017.

Mannington would be eligible to receive earn out payments based on volume retention metrics through mid-2020. Armstrong Flooring intends to use its existing plant and distribution networks to accommodate the increase in VCT volume to drive top and bottom line benefits through increased scale and capacity utilization. The transaction, which is subject to customary closing conditions, is expected to close during the second quarter of 2017 and to be funded through a combination of cash and availability on the existing asset-based revolving credit facility.

Mannington is a fourth-generation family-owned flooring company with a strong U.S. manufacturing base. According to Russell Grizzle, president and CEO of Mannington Mills, this transaction is an adjustment to Mannington's product portfolio. “The decision to sell the VCT business is in line with our long-term growth strategy and opens up opportunities for us to invest in high-growth high-profit markets and categories,” said Grizzle.

“Mannington’s successful history is based on growing our business through a combination of innovation, customer focus, and investment in opportunities in mid- to upper-end flooring product categories,” noted Grizzle. “We remain committed to a strong U.S. manufacturing base, to our surrounding communities, and to our valued distributor partners and customers.”

Armstrong Flooring President and CEO Don Maier commented: “I am pleased to announce this transaction. It gives us a good opportunity to increase revenue within the well-structured VCT category, which has historically generated above-average profitability within our product portfolio. We expect this transaction to be accretive to earnings in 2018 as we drive profitability through improved capacity utilization and scale using our existing facilities and distribution system. We have a strong history and deep expertise in VCT which makes this acquisition consistent with our strategy to support our legacy product lines while simultaneously investing in innovation and new growth initiatives to help us realize our medium-term goals.”

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