Printer Friendly

MOHAWK INDUSTRIES ANNOUNCES AGREEMENT TO ACQUIRE AMERICAN RUG CRAFTSMEN

 ATLANTA, March 9 /PRNewswire/ -- Mohawk Industries, Inc. (NASDAQ-NMS: MOHK) announced today that it has signed an agreement to acquire all of the outstanding stock of American Rug Craftsmen Inc. and an affiliated company, Burton Carpet and Rug Inc., both of which are owned by the same shareholders.
 Since its founding in 1984 by its current chief executive and majority shareholder, John C. Thornton, American Rug has grown rapidly and, together with Burton Carpet and Rug, is currently operating at an annual revenue rate of approximately $40 million. American Rug offers one of the broadest product lines of any domestic supplier of household rugs and mats, with an inventory of approximately 1,200 proprietary designs. American Rug manufactures and markets woven and tufted area rugs, border rugs and decorative mats. The company's area rugs are made from synthetic fibers such as polypropylene, polyester and nylon; its border rugs are constructed from broadloom carpet, and the decorative mats are made from purchased matting material which is cut, serged and screen printed by the company. The company's products are sold primarily to mass merchandisers, home centers and national chains.
 The Stock Purchase Agreement calls for a purchase price of $20 million, payable in cash, with provision for payment of up to an additional $15 million in cash, based on the earnings of the acquired businesses over the three years following closing. Thornton will enter into an employment agreement providing for his continued employment after closing and it is expected that the other members of American Rug's management team will also remain in their positions. The transaction is subject to the usual conditions to closing, and it is anticipated that the transaction will close on or about May 1.
 Commenting on the proposed acquisition, David L. Kolb, chairman and CEO of Mohawk, stated: "We are extremely pleased at the prospect of adding American Rug to Mohawk's other lines of business. Its products, which are complementary to those produced by our commercial and residential carpet divisions, are sold through different sales channels, and this acquisition will provide Mohawk with additional growth opportunities. Through the leadership of John Thornton, American Rug has grown rapidly since its inception and we believe there is strong potential for continued future growth of American Rug and for the realization of synergistic benefits from the combination of our two companies. Mr. Thornton will continue to manage and direct the business of this company and we are fortunate to have the benefits of his energy and talents."
 Kolb went on to say: "Based on our analysis of historical and expected results of the operations of American Rug, its effect on Mohawk's earnings per share will be slightly accretive this year, and if American Rug performs as expected, it will add positively to Mohawk's earnings per share in future years. Although we are financing this transaction with cash from our available lines of credit, we intend to explore various financing alternatives, including the possibility of either an offering of equity or convertible debt securities in the near future, depending, of course, on market conditions, in order to further improve our debt-to-equity ratio and restore our borrowing capacity. Any such financing would be done only on a non-dilutive basis."
 Commenting on the proposed acquisition, Thornton said: "We are excited about becoming a part of Mohawk Industries, which has had a record of extremely good performance in the carpet industry. Our rapid rate of growth made it necessary for us either to seek additional financing sources or join with a strong company such as Mohawk. We believe that the decision to join Mohawk is best for our shareholders and will allow American Rug to continue to exploit its growth potential. The market for our products is large and we expect to continue to be one of the leaders in this highly fragmented market."
 Mohawk Industries, Inc. is a leading producer of both woven and tufted broadloom carpeting for residential and commercial applications. Following its acquisition of Horizon Industries Inc. in October 1992, Mohawk became the third-largest carpet manufacturer in the world. Its production facilities are fully integrated from yarn preparation through finished goods. The company markets a wide variety of styles, primarily in the medium- to high-price points under its brand names Mohawk, Alexander Smith, Horizon, Harbinger and Helios.
 -0- 3/9/93
 /CONTACT: John D. Swift, vice president, Finance of Mohawk Industries, 404-951-6000/
 (MOHK)


CO: Mohawk Industries, Inc.; American Rug Craftsmen Inc.; Burton Carpet
 and Rug Inc. ST: Georgia IN: TEX SU: TNM


BN-CF -- AT001 -- 4355 03/09/93 08:36 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Mar 9, 1993
Words:758
Previous Article:STANDARD & POOR'S STOCK PRICE INDEX -- OPENING, FRIDAY, MARCH 5 /PRN/
Next Article:SOUTHERN NATIONAL/EAST COAST SAVINGS BANK AGREE TO MERGE
Topics:


Related Articles
MOHAWK INDUSTRIES, INC. COMPLETES ACQUISITION OF AMERICAN RUG CRAFTSMEN, INC.
MOHAWK INDUSTRIES ANNOUNCES AGREEMENT TO ACQUIRE CARPET AND RUG DIVISION OF FIELDCREST CANNON
MOHAWK INDUSTRIES ANNOUNCES CONSUMMATION OF ACQUISITION OF FIELDCREST CARPET AND RUG DIVISION
MOHAWK INDUSTRIES, INC. ANNOUNCES CONSUMMATION OF MERGER WITH ALADDIN MILLS, INC.
MOHAWK INDUSTRIES, INC. ANNOUNCES CONSUMMATION OF MERGER WITH ALADDIN MILLS, INC.
MOHAWK INDUSTRIES, INC. ANNOUNCES AGREEMENT TO ACQUIRE GALAXY CARPET MILLS, INC.
MOHAWK INDUSTRIES, INC. COMPLETES ACQUISITION OF GALAXY CARPET MILLS, INC.
Mohawk Industries, Inc. Announces Letter of Intent to Acquire Certain Assets of Diamond Rug & Carpet Mills, Inc.
Mohawk Industries, Inc. Announces Acquisition of Newmark & James, Inc.
Mohawk Industries, Inc. Announces Acquisition of American Weavers, LLC

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters