Mohawk Industries Inc. has agreed to buy the biggest carpet maker and distributor in Australia and New Zealand from the company's founding family.
Mohawk, already the world's biggest floorcovering company, said Monday it will acquire Godfrey Hirst Group, the leading flooring company in Australia and New Zealand with gobal sales of about $450 million in the fiscal year ended June 30.
The Calhoun, Ga.-based Mohawk already operates a comprehensive warehouse and sales network in Australia and New Zealand to distribute the company's wood, laminate, LVT, vinyl and carpet products.
Established in 1865, Godfrey Hirst is the biggest flooring manufacturer in Australia and New Zealand. The company has been owned and operated by the McKendrick family for the past 50 years and will continue to be led by R.G. "Kim" McKendrick, the CEO and Chairman.
Godfrey Hirst is the largest spinner of woollen carpet yarns in the Southern Hemisphere and one of the world's 10 biggest carpet manufacturers. The company employs more than 1,000 people in its manufacturing and distribution facilities across Australia and has a number of overseas offices, including about 70 employees in the United States.
"This is a great opportunity for Godfrey Hirst, our employees, customers and suppliers," McKendrick said in a statement Monday. "Mohawk and Godfrey Hirst share a long history as flooring industry leaders and a commitment to product innovation, design and superior customer service. This common heritage in our cultures, performance expectations and focus on excellence will enhance our growth opportunities in both soft and hard flooring."
Terms of the proposed purchase were not released as the details still were being negotiated. But published reports by The Australian Financial Review put the value of the deal at as much as $600 million Austrialian, or $450 million in U.S. currency.
Mohawk CEO Jeffrey S. Lorberbaum said the purchase should boost earnings for Mohawk next year and continue the company's global growth in floorcovering sales.
"Godfrey Hirst's marketing, manufacturing and distribution leadership will complement our current hard surface distribution and strengthen our portfolio," Lorberbaum said in an announcement of the purchase. "We will leverage our global flooring resources and talent to support Godfrey Hirst's outstanding management and accelerate their growth strategies."
Kemp Harr, publisher of Floor Focus magazine, said the purchase will expand Mohawk's presence in the luxury woollen carpet market, "where there is a lot of movement right now."
The transaction is expected to be completed during the first half of 2018, pending regulatory approvals. Mohawk anticipates the transaction will add to earnings within the first 12 months.
"Mohawk is using its strong management team and balance sheet to increase its participation in the global flooring market," Lorberbaum said. "With Godfrey Hirst, Mohawk will become the leader in flooring products in both Australia and New Zealand with a platform for significant growth."
Contact Dave Flessner at firstname.lastname@example.org or at 423-757-6340.
This story was updated Nov. 20 at 10:10 p.m. with more information.