Mohawk Industries, Inc. Announces Purchase of Wood Flooring Assets
26 June 2007 - 10:21PM
PR Newswire (US)
CALHOUN, Ga., June 26 /PRNewswire-FirstCall/ -- Mohawk Industries,
Inc. (NYSE:MHK) announced today that it has entered into an asset
purchase agreement with Columbia Forest Products for wood flooring
plants and working capital. The assets include two pre-finished
solid plants and one engineered wood plant in the U.S. and an
engineered wood plant in Malaysia. These plants currently represent
approximately $180 million of annual sales and have been Mohawk's
largest supplier of wood. The plants are currently experiencing
losses but the business is expected to be accretive after the first
year as we implement our integration plan. Losses following closing
are not expected to be material to Mohawk's results. This
transaction is expected to close in the third quarter of 2007 and
is subject to customary governmental approvals and closing
conditions. In commenting on the acquisition, Jeffrey S.
Lorberbaum, Chairman and CEO, stated, "Columbia has been an
important supplier to Mohawk since we began distributing wood
products. These are excellent assets which are operating at about
half their potential capacity. Over the next two years we will
invest some additional capital to achieve a low cost position in
the market. We will continue to support the Columbia brands sold
through independent distributors and enhance the product portfolio.
The acquisition enables us to fully participate in the $2.4 billion
wood flooring market which is anticipated to grow at 6% to 8% long
term. In the U.S., Mohawk will now have the number one or two
position in the wood, carpet, ceramic, laminate, stone, and rug
markets. This is another key element in Mohawk's strategy to offer
a total floor covering solution to our customers." Certain of the
statements in the immediately preceding paragraphs, particularly
anticipating future performance and business prospects constitute
"forward-looking statements" under the Private Securities
Litigation Reform Act of 1995. There can be no assurance that the
forward-looking statements will be accurate because they are based
on many assumptions, which involve risks and uncertainties,
including our ability to successfully implement our integration
plan, and other risks identified in Mohawk's SEC reports and public
announcements. Mohawk is a leading supplier of flooring for both
residential and commercial applications. Mohawk offers a complete
selection of carpet, ceramic tile, laminate, wood, stone, vinyl,
rugs and other home products. These products are marketed under the
premier brands in the industry, which include Mohawk, Karastan,
Ralph Lauren, Lees, Bigelow, Dal-Tile, American Olean, Unilin and
Quick Step. Mohawk's unique merchandising and marketing assist our
customers in creating the consumers' dream. Mohawk provides a
premium level of service with its own trucking fleet and over 250
local distribution locations. DATASOURCE: Mohawk Industries, Inc.
CONTACT: Frank H. Boykin, Chief Financial Officer of Mohawk
Industries, Inc., +1-706-624-2695 Web site:
http://www.mohawkind.com/
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