Worthington Armstrong Joint Venture Expands Solutions for Data Centers with Acquisition

Rhea-AI Summary

Armstrong World Industries (NYSE:AWI) and Worthington Enterprises (NYSE:WOR) announced that their joint venture, Worthington Armstrong (WAVE), has acquired the assets of Data Center Resources, (DCR). This acquisition includes DCR's Cool Shield brand, which specializes in customizable, modular aisle containment solutions for data centers.

The acquisition aims to expand WAVE's design and manufacturing capabilities in the data center market. Cool Shield solutions are designed to optimize power usage and increase cooling efficiency, resulting in lower operating costs and reduced strain on electrical grid infrastructure. WAVE plans to integrate these solutions with their DynaMax® structural grid and Armstrong ceiling products to offer comprehensive, energy-efficient solutions for data centers.

Positive

• Expansion into the growing data center market
• Acquisition of trusted and specified brand (Cool Shield) in the data center industry
• Potential for lower operating costs and increased energy efficiency in data centers
• Integration of Cool Shield with existing WAVE and Armstrong products for comprehensive solutions
• Anticipated acceleration of growth in scalable data center solutions

Negative

• None.

Financial Analyst

The acquisition of Data Center Resources (DCR) by Worthington Armstrong Joint Venture (WAVE) represents a strategic move to capitalize on the rapidly growing data center market. This expansion into customizable, modular aisle containment solutions under the Cool Shield brand has several key implications:

• Market Expansion: WAVE is positioning itself to capture a larger share of the data center infrastructure market, which is experiencing significant growth due to increased digital transformation and cloud computing adoption.
• Synergistic Integration: By combining DCR's Cool Shield products with WAVE's existing DynaMax® structural grid and Armstrong ceiling solutions, the company can offer more comprehensive and integrated solutions. This could lead to increased revenue per project and improved competitive positioning.
• Operational Efficiency: The focus on solutions that optimize power usage and increase cooling efficiency aligns with the industry trend towards more sustainable and cost-effective data center operations. This could drive demand among cost-conscious data center operators looking to reduce their operating expenses.
• Supply Chain Advantages: With the acquisition, WAVE can potentially streamline its supply chain and reduce costs by internalizing the production of these complementary products.

While the financial terms of the deal were not disclosed, the acquisition's impact on WAVE's revenue and profitability will be worth monitoring in upcoming financial reports. Investors in Armstrong World Industries (AWI) and Worthington Enterprises (WOR) should pay attention to how this acquisition contributes to their respective bottom lines, given their joint ownership of WAVE.

Tech Expert

The acquisition of Data Center Resources (DCR) by WAVE is a timely move in the rapidly evolving data center industry. Here's why this is significant from a technological perspective:

• Energy Efficiency: DCR's Cool Shield aisle containment solutions address a critical challenge in data centers - thermal management. By optimizing airflow and cooling efficiency, these solutions can significantly reduce power consumption, which is a major cost factor and environmental concern for data centers.
• Modular Design: The emphasis on modular, customizable solutions aligns with the trend towards more flexible and scalable data center designs. This approach allows for faster deployment and easier expansion, which is important in keeping up with the explosive growth of data processing needs.
• Infrastructure Strain Mitigation: By improving cooling efficiency, these solutions help reduce the strain on electrical grid infrastructure. This is particularly important as data centers face scrutiny for their high energy consumption and impact on local power grids.
• Construction Challenges: The acquisition addresses two key issues in data center construction: lead times and skilled labor availability. Modular, easy-to-install solutions can significantly reduce construction time and complexity, allowing for faster time-to-market for new data center capacity.

From a technological standpoint, this acquisition positions WAVE to offer more comprehensive and advanced solutions in the data center infrastructure space, potentially giving them a competitive edge in a market that is continuously seeking more efficient and sustainable technologies.

MALVERN, Pa.--(BUSINESS WIRE)-- Armstrong World Industries. Inc. (NYSE:AWI) and Worthington Enterprises (NYSE: WOR) announced today that their Worthington Armstrong joint venture (WAVE) has acquired all of the assets of Amherst, NY-based Data Center Resources, LLC (DCR) related to the design and manufacture of customizable, modular aisle containment solutions for data centers, under the Cool Shield brand.

“We are excited to expand our design and manufacturing capabilities for the data center market with this acquisition,” said WAVE President and CEO Doug Cadle. “Cool Shield is a trusted and specified choice among some of the largest data center owners and operators in the United States.”

DCR solutions are designed to optimize power usage and increase cooling efficiency within data centers, resulting in lower operating costs and less strain on electrical grid infrastructure. These solutions will also help solve other challenges presented by the growth in data centers, including construction lead times and skilled labor availability.

Cadle concluded, “These innovative aisle containment products, combined with our DynaMax® structural grid and Armstrong ceiling solutions, enable us to design and manufacture integrated solutions that reduce energy usage and lower operating costs with easy-to-install modular products. With WAVE’s innovative construction systems and Armstrong’s go-to-market strength, we anticipate accelerating the growth of these scalable solutions and delivering a unique value proposition for data center architects, engineers, specifiers and managers.”

About WAVE

WAVE is the North America leader in the design and production of suspended ceiling system solutions sold under the Armstrong brand name. A joint venture between Armstrong World Industries and Worthington Enterprises, WAVE combines the culture and strengths of both parent companies. WAVE employs over 400 employees and operates 7 manufacturing facilities.

About Armstrong World Industries

Armstrong World Industries, Inc. (AWI) is a leader in the design and manufacture of innovative ceiling and wall system solutions in the Americas. With $1.3 billion in revenue in 2023, AWI has approximately 3,500 employees and a manufacturing network of 19 facilities, in addition to the seven facilities operated by 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.

About Worthington Enterprises

Worthington Enterprises (NYSE: WOR) is a designer and manufacturer of market-leading brands that help enable people to live safer, healthier and more expressive lives. The Company operates with two primary business segments—Building Products and Consumer Products—with an emphasis on innovation, transformation and leadership. The Building Products segment includes cooking, heating, cooling and water solutions, architectural and acoustical grid ceilings and metal framing and accessories. The Consumer Products segment provides solutions for the tools, outdoor living and celebrations categories. The Company also serves the growing global hydrogen ecosystem via a joint venture focused on on-board fueling systems and gas containment solutions. Headquartered in Columbus, Ohio, Worthington Enterprises employs approximately 4,000 people throughout North America and Europe.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240801526149/en/

Theresa Womble, VP Investor Relations and Corporate Communications

Armstrong World Industries, Inc.

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

Sonya L. Higginbotham, SVP, Chief of Corporate Affairs, Communications & Sustainability

Worthington Enterprises, Inc.

sonya.higginbotham@wthg.com or (614) 438-7391

Source: Armstrong World Industries, Inc.

FAQ

What company did Worthington Armstrong (WAVE) acquire in the data center sector?

WAVE acquired the assets of Data Center Resources, (DCR), including their Cool Shield brand, which specializes in customizable, modular aisle containment solutions for data centers.

How will the acquisition of DCR benefit Armstrong World Industries (AWI) and Worthington Enterprises (WOR)?

The acquisition expands WAVE's design and manufacturing capabilities in the data center market, potentially leading to growth in scalable solutions and offering a unique value proposition for data center professionals.

What are the main advantages of Cool Shield solutions for data centers?

Cool Shield solutions optimize power usage, increase cooling efficiency, lower operating costs, and reduce strain on electrical grid infrastructure in data centers. They also address challenges like construction lead times and skilled labor availability.

How does WAVE plan to integrate Cool Shield products with its existing offerings?

WAVE plans to combine Cool Shield aisle containment products with their DynaMax® structural grid and Armstrong ceiling solutions to create integrated, energy-efficient solutions for data centers.