Armstrong to spin off flooring unit from ceilings

Home Inside FCNews Armstrong to spin off flooring unit from ceilings

Maier: Move will create a more agile company

February 16/23, 2015; Volume 28/Number 17

By Ken Ryan

Lancaster, Pa.—A stronger, more agile flooring business will emerge from the separation of the ceiling and flooring units of Armstrong World Industries. That’s the assessment of Donald Maier, CEO of Armstrong Flooring.

On Feb. 23, Armstrong World Industries announced it would spin off its flooring business, creating two publicly traded companies; the other company will focus on ceilings. The spinoff is expected to be complete in the first quarter of 2016, and both entities will retain Lancaster as headquarters.

Maier told FCNews the goal of separating the companies is to improve Armstrong Flooring’s “business agility” and focus on the flooring industry. Armstrong Flooring will run 17 manufacturing plants in three countries.

“As an independent company Armstrong Flooring will have greater flexibility to pursue our strategic growth opportunities and will be 100% focused on the flooring markets. Our strategic investments and resource deployment will no longer need to compete with our other business unit opportunities. Additionally, we will have direct access to capital markets to fund our growth agendas, and better alignment to our investors will accelerate execution of our strategy.”

The Armstrong and Bruce brand names will continue to serve the market.

As a stand-alone business, Maier said Armstrong Flooring would continue to invest in strategic initiatives to “grow and further transform the business.”

Maier added he believes the flooring business will be stronger and more agile as a result of this change, “and our goal is to continue to provide the high-quality products and superior service that so often differentiates us from competitors.”

According to Maier the separation would not change Armstrong’s approach to the market. “We have the best distributors in the industry and remain committed to going to market through our independent distributor network.”

In December, Armstrong announced it would stop funding its European flooring unit due to cooling housing demand on the continent.

Evercore Partners is advising Armstrong on the separation process. The ceilings business will be known as Armstrong Building Products, and Vic Grizzle will serve as its CEO. Armstrong did not specify what role, if any, current CEO Matt Espe would play after the spinoff.

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