Armstrong World Industries Expands Exterior Architectural Metal Capabilities with Acquisition of A. Zahner Company

Rhea-AI Summary

Armstrong World Industries (NYSE: AWI) has acquired A. Zahner Company, a Kansas City-based leader in exterior architectural metal solutions. Zahner, projected to generate revenue of approximately $42 million in 2024, specializes in design, engineering, and fabrication of complex exterior architectural metal projects.

The acquisition expands Armstrong's capabilities in the exterior architectural metal category, complementing their existing interior ceiling and specialty wall solutions. Zahner, founded in 1897, brings approximately 160 employees and production facilities in Missouri and Texas. Notable Zahner projects include SoFi Stadium, Petersen Automotive Museum, IBM headquarters, and Bloomberg Center.

This marks Armstrong's 12th Architectural Specialties acquisition since 2016, following the acquisition of BOK Modern, in 2023. The purchase was funded through existing cash and revolving credit facility.

Positive

• Expected revenue contribution of $42 million in 2024 from Zahner
• Expansion into high-margin exterior architectural metal segment
• Addition of 160 skilled employees and two production facilities
• Strategic complement to previous BOK Modern acquisition
• Portfolio diversification into exterior building solutions

Negative

• Additional debt taken through revolving credit facility for acquisition funding

Insights

Financial Analyst

The acquisition of A. Zahner Company represents a strategic expansion into the high-margin exterior architectural metal market for Armstrong World Industries. With Zahner's projected $42 million revenue in 2024, this deal strengthens AWI's architectural specialties segment and broadens its product portfolio. The acquisition marks AWI's 12th architectural specialties purchase since 2016, demonstrating a consistent growth strategy through M&A.

The deal's value proposition lies in Zahner's premium positioning and expertise in complex, high-design projects. Their involvement in prestigious projects like SoFi Stadium and Bloomberg Center indicates strong margins and pricing power. This acquisition complements the 2023 BOK Modern purchase, creating synergies in exterior architectural solutions.

The transaction was funded through existing cash and credit facilities, suggesting minimal impact on AWI's balance sheet flexibility. For AWI's $7 billion market cap, this acquisition represents a relatively small but strategic investment that could drive meaningful growth in the architectural specialties segment.

Market Research Analyst

This acquisition positions AWI strategically in the growing architectural metal solutions market. Zahner's expertise in computational design and advanced metal engineering systems provides AWI with significant competitive advantages in the high-end construction sector. The deal expands AWI's addressable market by adding exterior capabilities to their existing interior solutions portfolio.

Zahner's prestigious project portfolio and 160-person specialized workforce, including metallurgy and engineering experts, brings valuable intellectual capital to AWI. The acquisition enhances AWI's ability to serve architects and designers with comprehensive interior-exterior solutions, potentially increasing specification rates in major commercial and cultural projects.

The timing aligns with increasing demand for sophisticated architectural metal solutions in modern construction. This move could help AWI capture larger shares of construction budgets by offering integrated solutions across interior and exterior applications.

LANCASTER, Pa.--(BUSINESS WIRE)-- Armstrong World Industries. Inc. (NYSE: AWI), a leader in the innovation and manufacture of ceiling and wall solutions, announced today that it has acquired A. Zahner Company (Zahner). Based in Kansas City, Mo., Zahner is a widely recognized leader in the design, engineering and fabrication of highly crafted, complex exterior architectural metal solutions. Zahner’s advanced metal surfaces and engineering systems are unique in the industry and have been used in some of the most iconic commercial buildings, cultural centers and other structures in North America and beyond.

“We are thrilled to welcome Zahner and its talented team to the Armstrong family. Over the last decade, Armstrong has developed and acquired world class metal design and manufacturing capabilities for interior ceilings and specialty walls. The addition of Zahner allows us to further expand into the highly specifiable, exterior architectural metal category,” said Vic Grizzle, President and CEO, Armstrong World Industries. “This acquisition represents a rare opportunity to connect two complementary companies with long, proven legacies of integrity, innovation and excellence in quality and service. With Zahner, we have dramatically elevated and expanded our capabilities to design, engineer, and fabricate truly unique, high-design architectural metal projects. Providing a broad, growing portfolio of specifiable materials and solutions to enable architects and designers to bring their most creative visions into reality – inside and outside a building – is a clear differentiator for Armstrong.”

A pioneer in the use of metal in architecture, Zahner is renowned for its collaborative design and metal fabrication capabilities for large and complex projects. The company’s unique knowledge of computational design, metal finishing and versatile engineering systems enables architects’ highly imaginative ideas to become incredible realities through the mindful use of crafted metals. Zahner’s process begins at the inception of a project through close collaboration with architects, designers, artists and other partners to ensure the delivery of design intent with manufacturability and long-term performance integrity. The work of Zahner has shaped some of the most recognized places and spaces in the United States, including SoFi Stadium in Inglewood, Calif., the Petersen Automotive Museum in Los Angeles, Calif., IBM’s corporate headquarters in Armonk, N.Y., and the Bloomberg Center in New York City.

“We are excited to join Armstrong World Industries and look forward to the opportunities this presents for our people and clients,” said William Zahner, CEO of Zahner. “I am confident that together with Armstrong we can accelerate our growth with a partner that shares common values, led by a focus on innovative design and client satisfaction. This begins a new chapter in an ongoing story of applying innovation and collaboration to build the incredible.”

Zahner was founded in 1897 by Andrew Zahner as a sheet metal fabricator of cornices and has expanded under the Zahner family leadership to become the premier designer and manufacturer of high-design architectural metal solutions. The business has production facilities in Missouri and Texas with approximately 160 employees, including experts in metallurgy, structural and mechanical engineering, and complex project management. The company is projected to generate revenue of approximately $42 million in 2024.

With the addition of Zahner, Armstrong has completed 12 Architectural Specialties acquisitions since 2016 and vastly expanded its portfolio of products and solutions, including a range of substrate materials for interior and exterior applications, such as metal, wood, felt and architectural resin. The Zahner acquisition directly builds on and complements the exterior architectural metal capabilities of BOK Modern, LLC acquired by Armstrong in 2023. This broad portfolio enables Armstrong to participate in more spaces within the construction and renovation of a building with highly specified products and innovative solutions and is a key driver of the company’s growth strategy.

Armstrong funded the acquisition with existing cash and its revolving credit facility, and District Capital Partners acted as its buy-side adviser.

About Armstrong World Industries
Armstrong World Industries, Inc. (AWI) is a leader in the design and manufacture of innovative ceiling and wall solutions in the Americas. With $1.3 billion in revenue in 2023, AWI has more than 3,600 employees and a manufacturing network of 21 facilities, including Zahner, plus seven facilities dedicated to its WAVE joint venture. For over 160 years, Armstrong has delivered products and services to our customers that can transform how people design, build and experience spaces with aesthetics, acoustics, wellbeing and sustainability in mind.

Uncertainties Affecting Forward-Looking Statements
Disclosures in this release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, those relating to future financial and operational results, market and broader economic conditions and guidance. Those statements provide our future expectations or forecasts and can be identified by our use of words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “outlook,” “target,” “predict,” “may,” “will,” “would,” “could,” “should,” “seek,” and other words or phrases of similar meaning in connection with any discussion of future operating or financial performance. This includes annual guidance. Forward-looking statements, by their nature, address matters that are uncertain and involve risks because they relate to events and depend on circumstances that may or may not occur in the future. As a result, our actual results may differ materially from our expected results and from those expressed in our forward-looking statements. A more detailed discussion of the risks and uncertainties that could cause our actual results to differ materially from those projected, anticipated or implied is included in the “Risk Factors” and “Management’s Discussion and Analysis” sections of our reports on Form 10-K and Form 10-Q filed with the U.S. Securities and Exchange Commission (“SEC”), including our quarterly report for the quarter ended September 30, 2024. Forward-looking statements speak only as of the date they are made. We undertake no obligation to update any forward-looking statements beyond what is required under applicable securities law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241204725493/en/

Theresa Womble, tlwomble@armstrongceilings.com or (717) 396-6354

Source: Armstrong World Industries, Inc.

FAQ

What is the expected revenue from Zahner for Armstrong World Industries (AWI) in 2024?

Zahner is projected to generate revenue of approximately $42 million in 2024 for Armstrong World Industries.

How many acquisitions has Armstrong World Industries (AWI) completed in Architectural Specialties since 2016?

Armstrong World Industries has completed 12 Architectural Specialties acquisitions since 2016.

How many employees does Zahner bring to Armstrong World Industries (AWI)?

Zahner brings approximately 160 employees, including experts in metallurgy, structural and mechanical engineering, and complex project management.

What notable projects has Zahner completed before the AWI acquisition?

Zahner has completed notable projects including SoFi Stadium in Inglewood, Petersen Automotive Museum in Los Angeles, IBM's corporate headquarters in Armonk, and the Bloomberg Center in New York City.