Mohawk Industries buying Belgian company

Mohawk Industries buying Belgian company

January 29th, 2013 by Dave Flessner in Business Around the Region

Rolling out the red carpet

In the past three months, Mohawk Industries has struck deals to buy three more companies and boost company sales by more than 25 percent.

• Oct. 29, 2012 - Mohawk agrees to pay $150 million to buy Pergo, a laminate floor manufacturer with 2011 sales of $320 million.

• Dec. 20, 2012 - Mohawk enters definite share purchase agreement to acquire the Italian tile maker Fintiles S.p.A. and its subsidiaries, collectively known as the Marazzi Group, for more than $1.5 billion, including nearly $1.12 billion in cash and $317.2 million of Mohawk stock. The purchase should close before this summer and add $1.07 billion in sales.

• Jan 28 - Mohawk announces deal to buy Belgium panel board maker Spano Invest NV for $168 million. Spano had sales last year of $231 million.

In its third acquisition in as many months, Mohawk Industries agreed Monday to buy the Belgium panel board maker Spano Invest NV for $168 million.

The European foray comes just a month after Mohawk closed on its biggest deal ever -- the $1.5 billion purchase of the Italian tile maker, the Marazzi Group.

Mohawk, the world's biggest floorcovering company, said buying the chip and melamine board producer in Belgium will help supply its growing laminate floor business, including the pending $150 million purchase of Pergo that Mohawk announced three months ago.

Investors and rating agencies greeted the latest acquisition favorably on Monday, pushing up Mohawk's stock by 30 cents a share to $102.77. Monday's closing price for Mohawk surpassed the company's previous stock peak reached in May 2007.

Shares of Mohawk have doubled in the past 14 months as the housing has rebounded and Mohawk has broadened its carpet business into more hard surface flooring.

Mohawk is second in carpet shipments to the Dalton, Ga.-based Shaw Industries, but Mohawk is the world's biggest floorcovering company with growing sales in both hard and soft surfaces.

"Mohawk is buying some leading brands and suppliers, at attractive prices, and that should help a lot as the housing and construction markets come back," said Kemp Harr, publisher of Floor Focus magazine. "It seems to be the right time and they've got the money to do it."

Mohawk said Monday it expects the purchase of Spano will add to company earnings this year. Spano, which generated sales of $231 million in 2012, manufactures and distributes chip and melamine board. Spano's products are used to produce furniture and building products primarily in the Belgian market.

Spano became a leader in the chipboard industry in 1977 when it introduced the first continuous press operations to boost production.

Spano operates facilities in Belgium and has an electricity plant joint venture that converts waste wood into green energy.

"Spano expands not only our customer base with a focus on different channels of distribution, but also our knowledge and technical expertise, which we can leverage," Mohawk CEO Jeffrey S. Lorberbaum said in a statement Monday. "Together, there are many opportunities to optimize manufacturing assets, raw materials, and production efficiencies."

In a financial assessment of Mohawk also released Monday, the Fitch ratings service said the recent acquisitions "facilitate Mohawk's geographic expansion and diversification, broaden its product offerings and also provide the company with a strong profitable position in growing emerging markets."

Collectively, the three acquisitions should boost Mohawk revenues by more than 25 percent and will boost Mohawk's share of business from Europe to about 20 percent of company sales, Fitch said.

Contact Dave Flessner at or 757-6340.