Armstrong Flooring sells North American assets for $107 million; Lancaster location to stay open

Armstrong Flooring, Inc. announced Sunday it has sold its North American assets for $107 million in cash. 

The company said a binding Asset Purchase Agreement has been signed with a consortium of buyers consisting of AHF, LLC and Gordon Brothers to acquire substantially all Armstrong Flooring Inc.’s North American assets for $107 million in cash and assumption of specified assumed liabilities.  

Armstrong Flooring said AHF plans to keep the Lancaster location open. 

This binding Asset Purchase Agreement was the culmination of the Company’s Chapter 11 auction process for its North American assets.
 

“The auctions for the sale of the company’s Chinese and Australian businesses have not yet formally concluded, but we expect to conclude them in the near term,” a company spokesperson said in a press release.  

The company has received binding bids to acquire each of the Chinese business and the Australian business and will sign the definitive purchase agreements for these transactions as soon as the auctions close.  

The Chinese and Australian businesses will continue to operate as usual and the operations remain unaffected by the Chapter 11 cases, the spokesperson said. 

The AHF and Gordon Brothers consortium would acquire substantially all of the assets of North America. AHF plans to continue operating the Lancaster, Kankakee and Beech Creek locations, and the company would pursue an orderly winddown of its Jackson and Stillwater locations on July 15.  

“Pending consummation of the sale of its North American assets, which is scheduled for July 22, Armstrong Flooring will continue to operate as usual in all North American geographies and remains committed to its customers and other stakeholders,” the spokesperson said. 

The proposed transactions are the outcome of a Court-supervised auction that commenced on June 27 during which the bid from the AHF and Gordon Brothers consortium was the sole binding bid received. The proposed transactions are subject to Bankruptcy Court approval, as well as regulatory approvals and customary closing conditions. 

“We have been working hard to execute an efficient and value-maximizing sale of the business while keeping the best interests of our valued stakeholders at the forefront of all that we do,” said Michel Vermette, president and CEO. 

“In light of the agreement we have reached with AHF and Gordon Brothers, and the agreements we are close to signing with the buyers of the Chinese and Australian businesses following consummation of the auction, Armstrong Flooring is now one step closer to achieving that goal,” he said. 

He said the company had hoped to find a buyer for the entire business and avoid any closures, however, “based on the options available to us, we believe this is the best possible path forward for our business.”  

 “This reflects the support of our ABL lenders, creditors and other key stakeholders, and has been approved by our Board of Directors,” Vermette said. “While we cannot speak on behalf of the proposed buyers, we are encouraged that they see the potential of the company in the markets we serve and understand the role our people play in driving the business forward.” 

The proposed North American sale transaction will be heard at a U.S. Bankruptcy Court hearing currently scheduled for tomorrow and the sale transactions for the Chinese and Australian businesses also will be heard at the time provided the auction is closed in time. 

The company is working alongside its DIP lenders to enable Armstrong Flooring to continue operating its business while the buyers finalize all details and close the sale.