Flooring and surface brand Tarkett has signed an agreement to acquire 100% of Lexmark Carpet Mills.
Headquartered in Dalton, Georgia, Lexmark achieved around $120m of sales in 2017, employs 460 people, and operates one plant in the U.S. Lexmark’s growth model also included the successful acquisition of Northwest Carpets in 2015, a manufacturer of broadloom carpet for hospitality and niche commercial applications. Producing carpets primarily for the North American hospitality segment, Lexmark has, in recent years, extended its product range to address the residential market.
“The acquisition of Lexmark will position Tarkett as one of the leaders in the hospitality segment for carpets in North America. We will be able to further strengthen Lexmark’s offering in this segment as they will have access to Tarkett’s broader product portfolio,” explains Glen Morrison, CEO of Tarkett. “We will also leverage Tarkett’s global presence to enhance Lexmark’s positioning with key accounts worldwide.”
Whilst the acquisition will be immediately accretive to Group EBITDA margin, Tarkett has also identified sales and supply chain synergies with its North America carpet activities. The transaction will be financed with an existing credit facility. Following the acquisition, Tarkett expects its net consolidated debt leverage ratio to be around 2.5x EBITDA (proforma) at the end of the year.
“We are very excited to join Tarkett with whom we share the same vision and entrepreneurial values, as well as a strong commitment to servicing customers with solutions designed to meet a wide range of needs. Within the Tarkett group, we will be able to offer a larger choice of products to our customers and partners and provide an even stronger offering”, adds Paul Cleary, CEO of Lexmark.
The transaction is expected to be concluded before the end of this year, subject to regulatory approval and other customary closing conditions.