Armstrong to Separate into Two Public Companies
Separation enhances strategic focus and value creation potential; flooring and ceilings businesses have distinct business models and financial profiles.
Armstrong World Industries Inc. announced that its Board of Directors has unanimously approved a plan to separate the Company’s Flooring business from its Ceilings (Building Products) business, creating two independent industry-leading publicly traded companies. The separation is intended to be a tax-free spin-off of the Flooring business to the Company's shareholders, and is expected to be completed in the first quarter of 2016.
Armstrong believes that separating its Flooring and Ceilings businesses will create two strong companies that are leaders in their respective markets and that will benefit from increased strategic focus, streamlined operating structures and improved capital allocation. Each public company will offer investors a distinct and compelling investment opportunity based on different operating and financial models, end-market business cycles and strategic growth opportunities.
Matthew J. Espe, President and Chief Executive Officer of Armstrong, commented, “We are committed to taking decisive actions to deliver shareholder value, and separating our businesses at this time is the best way to accomplish that goal. We expect both businesses to improve their industry-leading positions and maximize their strategic opportunities. There is little existing overlap between the businesses, and we expect the separation to create minimal incremental operating expenses and result in no disruption to our customers, distributors, and suppliers. Both businesses will remain headquartered in Lancaster and we expect minimal impact on our employees.”
Espe continued, “This separation is a continuation of the Company’s actions since emergence from bankruptcy to create long-term shareholder value. Since 2008, we have improved margins by dramatically reducing SG&A, divesting non-core and under-performing businesses, including the Cabinets and European flooring businesses, and investing in growth opportunities around the world. Over the same period, we have returned over $1.5 billion of capital to our shareholders through dividends and share repurchases. The time is right for this separation as these two businesses are well-positioned to deliver value as independent companies.”