Mohawk Industries, Inc. Announces Purchase of Godfrey Hirst Group
Monday, November 27th, 2017
Mohawk Industries, Inc. announced that the Company has agreed to acquire Godfrey Hirst Group, the leading flooring company in Australia and New Zealand, further extending Mohawk's global position. Mohawk presently operates a comprehensive warehouse and sales network in Australia and New Zealand to distribute the company's wood, laminate, LVT, vinyl and carpet products.
Godfrey Hirst is the most vertically integrated flooring operation in Australia and New Zealand, providing broadloom, modular carpet and hard surface products for both residential and commercial applications. Godfrey Hirst's sales were about US$334 million in their most recent fiscal year, which ended June 30, 2017. The transaction is expected to be completed during the first half of 2018, pending customary closing conditions and regulatory approvals. Mohawk anticipates that the transaction will be accretive to EPS in the first twelve months.
Established in 1865, Godfrey Hirst is the premier flooring manufacturer in Australia and New Zealand as well as the market leader in design and innovation. The company has been owned and operated by the McKendrick family for the last 50 years and will continue to be led by R.G. (Kim) McKendrick, the CEO and Chairman.
"This is a great opportunity for Godfrey Hirst, our employees, customers and suppliers," said McKendrick. "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."
After decades of strong growth in Australia, Godfrey Hirst acquired Feltex, which was the leading carpet manufacturer in New Zealand in 2006. Today, Godfrey Hirst's state-of-the-art operations and distribution assets are the most vertically integrated in the region. The company produces premium carpets of wool, nylon, polypropylene and triexta to satisfy all channels and price points. Its products are sold under the well-known Godfrey Hirst, Feltex and Hycraft brands through specialty retailers, home centers, architects and designers. In recent years, Godfrey Hirst has expanded its product offering to provide a wide range of globally-sourced hard surface products, including LVT, wood and laminate.
Jeffrey S. Lorberbaum, Mohawk's chairman and chief executive officer, stated, "Mohawk's strategy in Australia and New Zealand has been to build a leading position in the flooring market. Godfrey Hirst's marketing, manufacturing and distribution leadership will complement our current hard surface distribution and strengthen our portfolio. We will leverage our global flooring resources and talent to support Godfrey Hirst's outstanding management and accelerate their growth strategies."
Lorberbaum added, "Mohawk is using its strong management team and balance sheet to increase its participation in the global flooring market. With Godfrey Hirst, Mohawk will become the leader in flooring products in both Australia and New Zealand with a platform for significant growth."
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.