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In the 11th hour of Armstrong Flooring’s Chapter 11 bankruptcy case, AHF Products has emerged as a buyer of the bankrupt flooring company—the very company from which it was spun off of four years ago.
AHF Products said it has reached an agreement to purchase certain Armstrong Flooring assets subject to court approval. The sale hearing currently is scheduled for July 12 where the court will be asked to approve the sale. “We believe this transaction represents tremendous opportunity for both AHF Products and our channel partners and continues our growth as a leader in the flooring industry,” said Brian Carson, president & CEO, AHF Products.
AHF Products is not the only outside entity that is involved in the purchase. The consortium of buyers consist of AHF, LLC and Gordon Brothers, which are slated to acquire substantially all of the company’s North American assets for $107 million in cash and assumption of specified assumed liabilities. Armstrong Flooring said it anticipates it will also disclose the definitive purchase agreements for its Chinese and Australian businesses shortly, having received binding bids to acquire each.
If consummated, a sale would enable Armstrong Flooring to pay its secured creditors, Pathlight Capital and Bank of America N.A., which are owed $98 million and $65 million, respectively. Pathlight Capital and Bank of America would also be reimbursed for a $24 million loan that got Armstrong Flooring through bankruptcy to a sale. Other priority payments would include administrative expenses and pre-bankruptcy bonuses promised to executives.
Armstrong Flooring and AHF Products are Lancaster County neighbors with a shared lineage. In fact, AHF was established in 2018 following American Industrial Partners’ (AIP) acquisition of the Armstrong Flooring wood division. According to then-Armstrong Flooring CEO, Don Maier, the transaction was intended to allow Armstrong Flooring to focus on LVT, rigid core as well as its wide range of resilient products, including vinyl composition tile and resilient sheet. “After carefully evaluating multiple options, we determined that separating the resilient and wood businesses is the best way to empower both businesses to better realize their core strengths,” Maier said at the time. “With this divestiture, Armstrong will become a pure resilient flooring company focused on a key growth area within the industry by harnessing our rich legacy to drive continued innovation and growth.”
Since its inception, AHF Products said it has grown rapidly in both the residential and commercial flooring segments by innovating and broadening its product offerings, through its world class stable of brands and channels of distribution. The company’s investments in new brands, products and capabilities, both organically and through acquisitions, has fueled this growth. The company said its strategic acquisitions have been a key driver in expanding its reach and product offering to provide its customers with industry-leading commercial and residential products, including hardwood, resilient and laminate. That is, and will continue to be, its strategy moving forward, the company said.