Mohawk Industries, Inc. Announces Purchase Of Marazzi Group
CALHOUN, Ga., Dec. 20, 2012 /CNW/ - Mohawk Industries, Inc.
(NYSE: MHK) today announced that the Company has entered into a
definitive agreement to acquire the Marazzi Group, which will make
Mohawk the worldwide leader in ceramic tile.
The Marazzi Group is a leading manufacturer and marketer of
ceramic tile in all its major geographies, including Russia, the United
States, Italy, France and Spain. Marazzi's 2011 revenues were about €833
million, or $1.16 billion, with
EBITDA of approximately 15.5% under historical IFRS accounting.
Marazzi is held by the Marazzi family and two private equity
funds—Permira and Private Equity Partners.
Mohawk is acquiring Marazzi for €1.17 billion, or approximately
$1.5 billion, with a combination of
cash and equity. Marazzi's estimated 2012 EBITDA of €145 million
represents a purchase multiple of about eight times. We expect to
complete the transaction during the first quarter of 2013 pending
customary closing conditions and regulatory approvals. Mohawk
anticipates that the transaction will be accretive in 2013.
Ceramic tile remains the world's most widely utilized flooring
product with an estimated worldwide consumption of more than 110
billion square feet and annual growth of 5 to 6%. Marazzi
distributes ceramic tile in more than 100 countries through a
strong international sales force, which will increase Mohawk's
worldwide growth.
Founded and managed by Filippo Marazzi,
Sr. and his family, the Marazzi Group has become a global
leader in ceramic tile with worldwide brand recognition. Marazzi's
product line features glazed ceramic, glazed porcelain, technical
tile and color body porcelain. Marazzi introduced the single fire
process that revolutionized the industry, making ceramic more
accessible to a wider market. Technological innovations continue
today with new introductions such as crystalized porcelain and
single-fired thin tiles. Marazzi operates manufacturing facilities
in Russia, the United States and Western Europe and employs around 6,300
people
Jeff Lorberbaum, Mohawk's
chairman and chief executive officer, stated, "This acquisition
represents the next step in the expansion of Mohawk's global
business and will make Mohawk a stronger company. We found Marrazi
attractive because of its solid management team and leadership
positions in the U.S., Russia and
Europe. Marazzi's differentiated
products, leading-edge design, efficient manufacturing and
exemplary service have created one of the most valued brands in the
industry. We have many opportunities to improve results by
leveraging best practices, operational expertise, product
innovation and manufacturing assets."
Marazzi has the number one position in the Russian ceramic
market, which is similar in size to the
United States. Marazzi operates a unique model that
optimizes its total supply chain from manufacturing to distribution
to retail. Marazzi operates two manufacturing sites and 21 regional
distribution centers. Marazzi owns and franchises more than 300
retail stores that carry only Marazzi products. About 50% of the
Marazzi Russian business is sold directly to end users, and the
retail advertising done by the stores has created a strong consumer
brand. We expect to continue the growth in Russia by expanding company owned and
franchised stores, other distribution channels and increasing our
geographic reach.
In the U.S., Marazzi's products are sold through independent
distributors, home centers and a few company service centers.
Leveraging the combined manufacturing expertise, design
capabilities and distribution systems, we will enhance our ceramic
business. The total residential and commercial offerings complement
each other and can satisfy every requirement in the market. We will
also be able to provide additional products from our facilities in
Mexico, China and Europe to compete directly with the large
quantity of imported ceramic tile.
Presently European flooring is at a low point where Marazzi has
leading positions in Italy,
France and Spain. Marazzi has rationalized its capacity
to align with the market and is implementing new strategies to
enhance its sales in the region and adjacent countries.
Improvements have been made that enhanced the manufacturing
efficiency, quality and sales effectiveness. Additional investments
are planned to further reduce manufacturing cost, increase sales
and expand our design capabilities.
Lorberbaum said, "The combination of Mohawk and Marazzi creates
opportunities to expand U.S. distribution through service centers
and other channels, source ceramic from our worldwide assets,
utilize our relationships to expand all product categories and
deploy leading innovation and design trends to all of our ceramic
businesses around the globe. Mohawk & Marazzi's strong
management and solid financial position combined with process and
material knowledge, distribution expertise, and synergies with
other products will deliver additional value to our
shareholders."
Barclays acted as the exclusive advisory to Mohawk on this
transaction. Mohawk has scheduled a conference call at 10:00 a.m. Eastern Time on Friday, December 21, 2012, to discuss the Marazzi
acquisition. The telephone number is 1-800-603-9255 toll free for
US/Canada and 1-706-634-2294 for
International/Local. Conference ID #83790978. A replay will also be
available until January 4, 2013 by
dialing 855-859-2056 toll free for US/local calls and 404-537-3406
for International/Local calls and entering Conference ID #
83790978.
Certain of the statements in the immediately preceding
paragraphs, particularly anticipating future performance, business
prospects, growth and operating strategies and similar matters and
those that include the words "could," "should," "believes,"
"anticipates," "expects," and "estimates," or similar expressions
constitute "forward-looking statements." For those statements,
Mohawk claims the protection of the safe harbor for forward-looking
statements contained in 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. The following
important factors could cause future results to differ: changes in
economic or industry conditions; competition; inflation in raw
material prices and other input costs; energy costs and supply;
timing and level of capital expenditures; timing and implementation
of price increases for the Company's products; impairment charges;
integration of acquisitions; international operations; introduction
of new products; rationalization of operations; tax, product and
other claims; litigation; and other risks identified in Mohawk's
SEC reports and public announcements.
ABOUT MOHAWK
Mohawk is a leading supplier of flooring for both residential
and commercial applications. Mohawk provides a complete selection
for all markets of carpet, ceramic tile, laminate, wood, stone,
vinyl and rugs. These products are marketed under the premier
brands in the industry including Mohawk, Karastan, Lees, Bigelow,
Durkan, Mohawk Home, Daltile, American Olean, Unilin and
Quick-Step. Mohawk's international presence includes operations in
Australia, Brazil, China, Europe, Malaysia, Mexico and Russia.
SOURCE Mohawk Industries, Inc.