Global flooring supplier Mohawk Industries, Inc. (MHK) announced that it intends to buy laminate floor manufacturer Pergo for $150 million in cash as it looks to expand its global footprint which already includes operations in the U.S., Australia, Brazil, China, Europe, Malaysia, Mexico and Russia. Pergo has an established presence in the “Do It Yourself” improvement sector in the United States and Europe with a name that has become synonymous with laminate flooring. 2011 sales totaled about $320 million for Pergo.
Pergo operates manufacturing facilities in Sweden and the U.S.
The purchase complements Mohawk’s specialty distribution network and “offers significant opportunities to optimize the assets of both companies while enhancing the design and product performance of both brands,” according to Jeffrey S. Lorberbaum, Chief Executive at Calhoun, Georgia-based Mohawk.
The transaction is expected to close no later than the first quarter of 2013 and to be immediately accretive.
Mohawk sells a full spectrum of flooring products, including carpet, wood and ceramic tile for both commercial and residential applications under brand names such as Daltile, American Olean and its namesake.
Mohawk will report third quarter earnings next month, but said in August that second-quarter earnings rose 20 percent as margins remained strong.
Shares of Mohawk have been steadily trekking upward for the last 13 months. After bottoming at $39.93 in September 2011, MHK has more than doubled in value; closing trading on Friday at $80.27 per share.
Markets are closed on Monday as the eastern seaboard of the United States faces Hurricane Sandy heading inland.