Mountville, Pa.—An affiliate of Paceline Equity Partners, LLC—a Dallas-based private equity manager—has entered into a definitive agreement to acquire AHF Products from American Industrial Partners (AIP).
“AHF Products, with its proven track record for growth, has built a comprehensive portfolio of trusted flooring brands and represents an attractive opportunity to continue to transform the industry,” said Sam Loughlin, CEO of Paceline. “Leveraging our building products experience and a strong team at AHF, we expect to generate significant growth through organic opportunities and mergers and acquisition.”
AHF Products, the largest U.S. wood flooring manufacturer by brand, has expanded its growing portfolio to include vinyl plank flooring, laminate and commercial flooring products. Its broad stable includes well-known brands such as Bruce, Capella, Hartco, HomerWood, Hearthwood, LM Flooring, Robbins, Hearthwood and, more recently, American OEM.
Brian Carson, CEO of AHF Products, said the acquisition by Paceline—when finalized—will pave the way for continued investment in AHF’s aggressive growth plans and initiatives. Since AHF was acquired by AIP in November three years ago, it has grown, on average, by 20% each of the past three years—including 2020, the year the COVID-19 pandemic hit.
“AHF Products has experienced incredible growth since its inception and we’re thrilled to partner with Paceline with a shared vision of how we will take the business to the next level,” Carson said. “When Paceline learned about our business, they were impressed with our growth, our team and our successes. They saw a tremendous opportunity to step in and become our financial sponsors for the next steps in AHF’s journey.”
That next phase, according to Carson, will entail an acceleration of the expansion strategies and manufacturing investments AIP has financed over the past three years. “In our meetings with Paceline we shared opportunities where we think we can still create tremendous value for our customers as well as value for AHF,” Carson stated. “They see many of those same opportunities.”
AHF Products, through its eight global manufacturing plants, has the capacity to produce a range of both solid and engineered wood flooring products, and it serves customers through three distribution locations. Over the past two years, the company has acquired a vinyl plank flooring manufacturer, formed a partnership with a domestic laminate flooring supplier and expanded its product offering to include a range of hard surface commercial flooring products.
Future acquisitions and partnerships, Carson noted, are not out of the realm of possibility. “Paceline has ready access to capital to fuel our ideas,” he explained. “They believe in our growth strategies, and they love the flooring business. They are customer oriented, as we are, and are willing to invest in companies that are innovators in manufacturing, marketing and merchandising.”
An attractive target
AIP—AHF Products’ current owner until the deal with Paceline is fully consummated—saw the same potential in AHF that compelled Paceline to make a play for the company. “It was three years ago this month that AIP announced they were acquiring AHF Products,” Carson recalled. “They saw a diamond in the rough and that they could invest in good ideas and strategies. Our business has really grown over the past three years, and AIP saw an opportunity to get a return on their investment in AHF.”
Rick Hoffman, a partner at AIP, concurred. “We have greatly enjoyed the partnership with AHF Products, its best-in-class management team and its dedicated global workforce. Since its formation in 2019, AHF Products has experienced remarkable growth and is well positioned to continue its trajectory through continued innovation and superb customer service.”
The capital infusion from Paceline will support a range of AHF’s initiatives moving forward, including its stated objective to boost stateside production capacity. Given all the supply-chain challenges the flooring industry is dealing with today, the timing is ideal.
“Whether it’s our acquisition of American OEM—which gave us more engineered hardwood capacity in the U.S.—or our partnerships on the laminate side, we are expanding our capacity to provide products made right here in America,” Carson said. “That translates into greater lead-time reliability without all the instability of tariffs, duties, freight and everything that goes along with that. At the same time, we’ve also expanded our Cambodia plant. These steps will help better position us in the market to meet growing demand from our customers.”
The transaction is subject to customary closing conditions and is expected to close in the first quarter of 2022.