Mohawk Industries Inc.continued its global buying spree Tuesday with an agreement to buy the Belgium-based IVC Group for $1.2 billion.
Mohawk, the Calhoun, Ga.-based carpet maker that is already the world's biggest manufacturer of rugs, ceramic tile and laminate floors, will also become one of the biggest producers of sheet vinyl and luxury vinyl tile, or LVT flooring, once the acquisition of IVC is completed by the end of March.
Mohawk said buying the 18-year-old IVC will add another $700 million in sales and should boost company profits within the first year.
"There are many potential synergies between IVC and Mohawk in both Europe and the U.S," Mohawk CEO Jeff Lorberbaum said in announcing the deal Tuesday night. "Our greatest opportunities are in [luxury vinyl tile], which has increased globally around 18 percent in the past year. IVC is the fastest growing manufacturer of [luxury vinyl tile] in Europe, and their manufacturing expertise will help start up our new Belgian [luxury vinyl tile] factory faster.
The IVC Group was founded in Belgium in 1997 by Filip Balcaen, who is currently IVC's chairman and primary shareholder. IVC is a major sheet vinyl provider in Europe and the United States and is also a leading player in the fast growing LVT category.
IVC is building its second vinyl plant in Dalton, Ga., which is expected to add 200 jobs by this spring. The company has invested $100 million in Dalton production facilities since 2012 to tap the growing market for sheet vinyl and especially LTV.
"IVC's sheet vinyl is constructed with a fiberglass core that provides a cushioned product that does not crack, curl or expand, making it durable and easy to install," Lorberbaum said. "These performance features are preferred by the consumer and should enhance our growth."
Mohawk has distributed sheet vinyl and LVT products for a number of years, Lorberbaum said.
The purchase of IVC is among nearly $5 billion of purchases by Mohawk in the past 13 years, including The Marazzi Group in Italy, Pergo in Germany, the Spano Group in Beglium, Unilin Holding NV in Belgium, and Dal-Tile International Inc.
"This makes Mohawk the leader in runs, ceramic tile, laminate flooring and now resilient flooring," said Kemp Harr, publisher of Floor Focus magazine,
In the U.S. flooring market, LVT now represents about 5 percent of the total flooring market. LVT sales are projected to grow by more than 15 percent annually through the end of the decade.
IVC's new LVT plant in Dalton will be one of the world's largest, most efficient production lines, Lorberbaum said.
Mohawk's proposed acquisition is expected to be completed around the end of the first quarter of 2015, pending customary closing conditions and regulatory approvals.
Mohawk announced the deal after the market closed Tuesday. Ahead of the announcement, Mohawk stock rose by $2.35 per share, or nearly 1.5 percent, to close at an all-time high of $160.11 per share.
Contact Dave Flessner at dflessner@timesfree press.com or at 757-6340.