After two months in bankruptcy, Armstrong Flooring is on the verge of dealing its way out.
- The Lancaster-based manufacturer said yesterday it has agreed to sell its North American assets to a consortium that includes AHF Products, a former division of Armstrong Flooring.
- Mountville-based AHF and Boston-based Gordon Brothers have agreed to pay $107 million in cash and assume unspecified liabilities in exchange for the North American assets of Armstrong Flooring.
- The deal, which must be approved by the bankruptcy court, is expected to close July 22.
- Under the terms of the deal, AHF and Gordon plan to continue operating Armstrong Flooring plants in Lancaster, Beech Creek and Kankakee, Illinois, according to a press release issued Sunday evening.
- Armstrong Flooring plans to wind down operations at its plants in Jackson, Mississippi, and Stillwater, Oklahoma, on July 15.
What’s AHF: The former hardwood flooring division of Armstrong Flooring.
- Armstrong Flooring sold the division for $100 million in 2018 to a private equity firm called American Industrial Partners.
- American Industrial sold AHF last year to another private equity firm, Paceline Equity Partners. The price was not disclosed.
- Along the way, AHF made some acquisitions of its own and began branching into vinyl flooring, a specialty of its former parent, Armstrong Flooring.
- The company now has about 2,600 employees working at factories and distribution centers across the U.S. and in Cambodia.
- AHF is led by Brian Carson, who was an Armstrong executive in the 1990s and early 2000s. He went on to work for larger flooring company Mohawk Industries before joining AHF as president and CEO in February 2019.
- Gordon Brothers is a corporate turnaround and liquidation specialist.
The background: Armstrong Flooring declared bankruptcy in early May, citing inflation, supply chain challenges and continued headwinds from the Covid-19 pandemic.
- The company had been trying to find a buyer since late 2021 and figured bankruptcy would help to expedite the process.
- Armstrong Flooring employs about 600 people in Lancaster and more than 1,600 overall
- The company had sales last year of $649.9 million and a net loss of $53 million.
- The bankruptcy covered the company’s North American operations, not its operations in China and Australia. However, all operations have been for sale.
- Armstrong Flooring had been part of Armstrong World Industries, a company that traces its roots to the 19th century. But the two companies separated in 2016.
- Armstrong World, also based in Lancaster, continues as a manufacturer of ceilings and walls.
What’s next: A hearing July 12 in bankruptcy court where Armstrong Flooring hopes to win approval for the sale to AHF and Gordon Brown.
- In its press release, yesterday, the company said it also is working to close sales of its Australian and China operations to separate buyers. No further details were available.
- Also not clear Sunday night was the fate of the Armstrong Flooring headquarters in the Greenfield corporate park, where the company moved in 2021.
- A spokesperson declined to comment beyond the press release.
