Mohawk Industries Announces Acquisition of Vitromex Ceramic Tile Business From Grupo Industrial Saltillo

Rhea-AI Summary

Mohawk Industries has announced an agreement to acquire the Vitromex ceramic tile business from Grupo Industrial Saltillo for approximately $293 million in cash. The acquisition, expected to close in the second half of 2022, will enhance Mohawk's operational footprint and customer base in Mexico, where Vitromex holds a leading position in the $1.7 billion ceramic tile market. In 2021, Vitromex generated revenues of approximately $204 million. Mohawk anticipates this acquisition will be accretive to earnings and strengthen their market presence.

Positive

• Acquisition of Vitromex enhances Mohawk's operational footprint in Mexico.
• Vitromex generated $204 million in revenue in 2021, expected to boost Mohawk's earnings.
• Increased market share in the $1.7 billion Mexican ceramic tile market.

Negative

• None.

CALHOUN, Georgia, June 03, 2022 (GLOBE NEWSWIRE) -- Mohawk Industries, Inc. (NYSE: MHK) announced today that it has entered into an agreement to purchase the Vitromex ceramic tile business from Grupo Industrial Saltillo (GIS) for approximately $293 million in cash. The transaction is expected to close in the second half of 2022 and is subject to the approval of GIS’s shareholders, as well as customary government approvals and closing conditions. The Vitromex business is expected to be accretive to Mohawk's earnings.

Vitromex was founded in 1967 and includes four manufacturing facilities strategically located throughout Mexico. When combined with Mohawk’s current Mexican operations, this expanded footprint will enhance the Company’s customer base, manufacturing efficiencies and logistical capabilities. Vitromex has built a leading position in the $1.7 billion (2.9 billion square feet) Mexican ceramic tile market with a broad distribution network and a product offering that includes glazed ceramic, porcelain, mosaics and decorative tiles. In 2021, Vitromex generated revenues of approximately $204 million.

In commenting on the acquisition, Jeffrey S. Lorberbaum, Mohawk’s chairman and CEO, stated, “In the past decade, we have significantly increased our participation in the Mexican ceramic tile market, including developing a world-class organization and constructing a state-of-the-art facility in Salamanca. Ceramic tile is the primary flooring utilized in Mexico, and the market has grown approximately eleven percent in pesos per year over the past five years. Combined with Vitromex, we will offer our customers a complete array of residential and commercial products at all price points with enhanced service capabilities. Vitromex is one of the most highly regarded brands in the Mexican market and is recognized as a leader in innovation and design. We are pleased to welcome their talented team into the Mohawk global ceramic business. We will provide additional commentary on the Vitromex acquisition during our second quarter investor call.”

ABOUT MOHAWK INDUSTRIES
Mohawk Industries is the leading global flooring manufacturer that creates products to enhance residential and commercial spaces around the world. Mohawk’s vertically integrated manufacturing and distribution processes provide competitive advantages in the production of carpet, rugs, ceramic tile, laminate, wood, stone and vinyl flooring. Our industry leading innovation has yielded products and technologies that differentiate our brands in the marketplace and satisfy all remodeling and new construction requirements. Our brands are among the most recognized in the industry and include American Olean, Daltile, Durkan, Eliane, Feltex, Godfrey Hirst, IVC, Karastan, Marazzi, Mohawk, Mohawk Group, Pergo, Quick-Step and Unilin. During the past decade, Mohawk has transformed its business from an American carpet manufacturer into the world’s largest flooring company with operations around the globe.

Certain of the statements in the immediately preceding paragraphs, particularly those anticipating future performance, business prospects, growth and operating strategies and similar matters and those that include the words “could,” “should,” “believes,” “anticipates,” “expects,” and “estimates,” or similar expressions constitute “forward-looking statements.” For those statements, Mohawk claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. There can be no assurance that the forward-looking statements will be accurate because they are based on many assumptions, which involve risks and uncertainties. The following important factors could cause future results to differ: changes in economic or industry conditions; competition; inflation and deflation in freight, raw material prices and other input costs; inflation and deflation in consumer markets; currency fluctuations; energy costs and supply; timing and level of capital expenditures; timing and implementation of price increases for the Company’s products; impairment charges; integration of acquisitions; international operations; introduction of new products; rationalization of operations; taxes and tax reform, product and other claims; litigation; the risks and uncertainty related to the COVID-19 pandemic; regulatory and political changes in the jurisdictions in which the Company does business and other risks identified in Mohawk’s SEC reports and public announcements.

Contact: James Brunk, Chief Financial Officer (706) 624-2239

FAQ

What is the value of the acquisition of Vitromex by Mohawk Industries?

The acquisition is valued at approximately $293 million in cash.

When is the Vitromex acquisition expected to close?

The acquisition is expected to close in the second half of 2022.

What financial performance did Vitromex achieve in 2021?

In 2021, Vitromex generated approximately $204 million in revenue.

How does the acquisition impact Mohawk Industries' market position?

The acquisition is expected to enhance Mohawk's operational efficiencies and customer base in Mexico.

What market is Vitromex a leader in?

Vitromex is a leader in the $1.7 billion Mexican ceramic tile market.