An affiliate of private equity firm American Industrial Partners closed its purchase of Armstrong Flooring Inc.'s wood flooring segment.
The sale of Armstrong Wood Products Inc. generated about $90 million in net proceeds for Armstrong Flooring. The deal is subject to a post-closing working capital adjustment that is expected to be finalized in the first quarter. The unit was categorized as a discontinued operation, starting in the fourth quarter of 2018.
Lancaster, Pa.-based Armstrong Flooring, which specializes in flooring products, expects the sale to strengthen its focus on vinyl tile and rigid core products, as well as a range of resilient categories. It plans to return a portion of the net proceeds to its shareholders.
Armstrong Flooring also obtained a new five-year secured credit facility, comprising a $75 million term loan A and a $75 million revolver. The facility, which is due in 2023, will carry an interest rate equal to the London interbank offered rate plus a spread of 1.50% to 2.25%.