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AIP closes acquisition of Armstrong Flooring's wood products division

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%.