Floor & Decor Accelerates its Growth in Commercial Flooring with the Acquisition of Spartan Surfaces
May 13 2021 - 3:05PM
Business Wire
Floor & Decor (NYSE: FND) today announced that it has
entered into a definitive agreement to acquire 100% of Spartan
Surfaces, a leading end-to-end commercial flooring specifying
distribution company headquartered in Bel Air, Maryland for
consideration of up to $90 million. A portion of the consideration
will be paid through 2024 based on the achievement of predefined
fiscal performance goals. The acquisition will be financed with
cash-on-hand and $5 million of Floor & Decor common stock. It
is expected to be accretive but not material to Floor & Decor’s
diluted earnings per share for fiscal 2021, excluding transaction
and integration costs. Spartan Surfaces will operate as a
subsidiary of Floor & Decor Holdings, Inc. and will continue to
be led by the Spartan Surfaces senior management team. The
transaction is expected to close in the second quarter of fiscal
2021.
Tom Taylor, Floor & Decor’s Chief Executive Officer, stated,
“We have seen strong growth in our commercial business over the
last several years by providing a simplified, reliable and lower
cost solution for commercial projects that leverages our
merchandise sourcing and supply chain infrastructure. The
addressable commercial market is large at an estimated $13 billion,
and we believe Spartan Surfaces is the right strategic partner to
enable us to incrementally accelerate our commercial flooring
growth plans through their scalable specifying and consultative
selling business model that primarily serves the architectural and
design community. Just as we’ve revolutionized how hard surface
flooring is purchased in retail, we see multiple sources of
potential value creation by collectively leveraging each company’s
core strengths, and we are excited about supporting Spartan
Surfaces’ accelerated growth plans.”
Kevin Jablon, Founder and CEO of Spartan Surfaces stated, “Floor
& Decor’s extensive sourcing and distribution capabilities of
innovative, trend-forward products will serve as a key selling
point for our business development team and for projects that
depend on reliability and near-term supply. As we look to the
future, we are excited that Floor & Decor has the experience
and resources to help us accelerate our growth plans into many
untapped and highly fragmented markets across the United States,
while maintaining our unique culture.”
Barclays Capital acted as exclusive financial advisor, and
Kilpatrick Townsend & Stockton LLP acted as legal advisor to
Floor & Decor. Chesapeake Corporate Advisors acted as exclusive
financial advisor, and Venable LLP acted as legal advisor to
Spartan Surfaces.
Conference Call to Discuss
Acquisition
A conference call to discuss this transaction with analysts and
investors is scheduled for today, May 13, 2021, at 5:00 p.m.
Eastern Daylight Time. If you would like to participate in the
conference call, please dial (877) 300-8521 or (412) 317-6026, if
calling internationally, please dial in approximately 10 minutes
prior to the start of the call. A live audio webcast of the
conference call and downloadable slides will be available online
at: ir.flooranddecor.com.
A recorded replay of the conference call will be available
within two hours of the conclusion of the call and can be accessed
both online at ir.flooranddecor.com or by dialing 844-512-2921
(international callers please dial 412-317-6671). The pin number to
access the telephone replay is 10156481. The replay will be
available until May 20, 2021.
About Floor & Decor
Founded in 2000, Atlanta based Floor & Decor is a leading,
high-growth specialty retailer of hard-surface flooring, operating
140 warehouse stores in 32 states as of April 1, 2021. The stores
offer the industry’s broadest in-stock assortment of tile, wood,
laminate, vinyl, and natural stone flooring along with decorative
and installation accessories and adjacent categories. The stores
also offer free design services and a dedicated pro sales team.
Products are directly sourced from manufacturers around the globe,
which enables it to bring the world’s best and most innovative
flooring trends to its customers, at everyday low prices. Floor
& Decor has locations nationwide, but each store is bolstered
by a local focus that creates a unique store experience and mix of
products that meet the needs of each market served. For more
information, visit www.flooranddecor.com.
About Spartan Surfaces
Founded in 2007, Spartan Surfaces is a fast-growing commercial
specialty hard-surface flooring distribution company that focuses
on specifying and selling commercial flooring through the Architect
and Design Community, end users and commercial flooring
contractors. Today, the company has 106 employees that cover
three-fifths of the United States with showrooms in Washington D.C.
and Chicago. For more information, visit
www.spartansurfaces.com.
Forward-Looking
Statements
This press release contains statements that are not historical
facts but rather forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are usually identified by or are
associated with such words as “intend,” “plan,” “believe,”
“estimate,” “expect,” “anticipate” and/or the negatives or
variations of these terms or similar terminology. Such
forward-looking statements include those that address activities,
events or developments that the Company or its management believes
or anticipates may occur in the future, including the closing of
the transaction and the benefits expected therefrom, including
revenue growth, earnings enhancements and synergies from the
transaction. All forward-looking statements are based upon the
Company’s current expectations, various assumptions, and data
available from third parties. The Company’s expectations and
assumptions are expressed in good faith, and the Company believes
there is a reasonable basis for them. However, there can be no
assurance that such forward-looking statements will materialize or
prove to be correct as forward-looking statements are inherently
subject to known and unknown risks, uncertainties and other factors
which may cause actual future results, performance or achievements
to differ materially from the future results, performance or
achievements expressed in or implied by such forward-looking
statements. Numerous risks, uncertainties and other factors may
cause actual results to differ materially from those set out in the
forward-looking statements, including: the possibility that the
transaction will not close or that the closing may be delayed; the
possibility that we may be unable to obtain regulatory approval for
the transaction; the potential for litigation or governmental
investigations relating to the transaction; the occurrence of
events, changes or circumstances that could give rise to the
termination of the definitive agreement; the risk that we may be
unable to successfully integrate the acquired business; the risk
that we may not realize the benefits expected from the transaction;
potential adverse reactions or changes to business or employee
relationships, including those resulting from the announcement of
the transaction; the risk that the funds required to complete the
transaction become unavailable; the possibility that completing the
transaction may distract the Company’s management from other
important matters; and the other factors discussed in Item 1A,
“Risk Factors” in the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2020, and in the Company’s other
filings with the Securities and Exchange Commission which are
available at http://sec.gov. The Company undertakes no obligation
to update publicly or revise any forward-looking statements in
light of new information or future events. For any forward-looking
statements contained in this or any other document, the Company
claims the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform
Act of 1995, and the Company assumes no obligation to update any
such statement.
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version on businesswire.com: https://www.businesswire.com/news/home/20210513005994/en/
Investor Contacts: Wayne Hood Vice President of Investor
Relations 678-505-4415 wayne.hood@flooranddecor.com or Matt
McConnell Senior Manager of Investor Relations 770-257-1374
matthew.mcconnell@flooranddecor.com
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