AHF Products and Gordon Brothers Enter Armstrong Flooring Bankruptcy Proceedings: Here’s What We Know [Analysis] | Local company
Understanding the two new companies that entered Armstrong Flooring Inc.’s bankruptcy proceedings can shed some light on the direction the iconic Lancaster company is headed.
The companies, AHF Products and Gordon Brothers, are non-creditors, meaning they are not owed any money, and they surfaced this week in relatively common filings.
One has Armstrong Flooring roots – West Hempfield Township-based flooring manufacturer AHF was once part of Armstrong Flooring. Additionally, AHF’s CEO worked for Armstrong Flooring’s former parent company, Armstrong World Industries. The private company AHF also competes in the same market as Armstrong Flooring.
The prospect of AHF being part of a deal to buy some of Armstrong Flooring’s North American assets hinges on more than its appearance in court as Armstrong Flooring prepares to petition a judge for approve an agreement. On Thursday, the AHF announced a mandatory town hall meeting for that afternoon as Armstrong Flooring had to present a deal to the judge. Around the same time Armstrong Flooring backed out of taking the deal to court, AHF called off the meeting.
AHF did not respond to questions from LNP | LancasterOnline asks if it expects to be part of a deal to buy all or part of Armstrong Flooring.
The second name is Boston-based Gordon Brothers, an international consolidation, financing and liquidation broker.
Given that Armstrong Flooring announced on Friday that it was working to finalize a deal that would preserve a “substantial part” of its North American operations, Gordon Brothers’ role may be to liquidate the remaining parts of the business.
Lawyers for AHF and Gordon Brothers this week filed petitions for admission to Delaware bankruptcy court, a routine formality in court proceedings. The judge in charge of the case has not yet given his approval.
Here’s more of what we know about AHF and Gordon Brothers:
A look at AHF products
Armstrong Flooring sold its wood flooring business, AHF Products, to private equity firm American Industrial Partners for $100 million in 2018. Since then, AHF has grown to include vinyl, planks, laminates and commercial products.
Paceline, another Dallas-based private equity firm, bought AHF in February for an undisclosed price.
In January 2021, AHF branched out deeper into luxury vinyl tile manufacturing by purchasing Parterre Flooring Systems for an undisclosed price. This decision put AHF in direct competition with its former owner, Armstrong Flooring. The acquisition was AHF’s third after agreeing to buy a hardwood flooring plant from a Tennessee-based U.S. OEM in August 2021, and its purchase of Texas-based LM Flooring in 2019.
AHF employs more than 2,300 people with reported revenues of over $400 million. Union membership is unclear company-wide, but the Teamsters represent about 400 workers, who manufacture hardwood flooring, under several names, including Bruce Hardwood in Beverly, West Virginia.
AHF operates eight manufacturing facilities, seven in the United States and one in Cambodia, and three domestic distribution facilities. It has facilities in Titusville, Pennsylvania (Crawford County); Warren, Arkansas; Oneida, Tennessee; Western Plains, Missouri; Somerset, Kentucky; Map, Texas; and Beverly, West Virginia. The Beverly factory was once owned by Armstrong Flooring.
AHF is led by former Armstrong World Industries executive Brian Carson, who started with AWI in 1990 out of college. He spent 16 years in operational leadership positions at Armstrong World Industries, including as senior vice president of resilient and hardwood flooring in North America.
Carson left in 2006 to join Mohawk Flooring, an Atlanta-based manufacturer of carpet, wood, vinyl, tile and rugs. He returned to Lancaster County in 2019.
Armstrong World Industries entered the wood flooring and cabinetry business by purchasing Dallas-based Triangle Pacific in 1998 for $1.15 billion. She sold the cabinetry business to American Industrial Partners in 2012 for $27 million.
Armstrong Flooring was spun off from Armstrong World Industries in April 2016 as an independent public company.
A Look at the Gordon Brothers
Founded in 1903, Gordon Brothers has 30 offices on five continents and claims to conduct more than $70 billion in divestments and appraisals each year. He built this international business by helping struggling companies navigate a variety of strategic or financial difficulties, or what he calls “transformation periods.”
Gordon Brothers offers advice across all commercial and industrial sectors, but has become particularly known for helping retail businesses go bankrupt, which can include providing short-term loans or overseeing store liquidations. and other assets.
Gordon Brothers has helped close store sales for Toys R Us, KB Toys, Hollywood Video, Radio Shack, Office Depot, Circuit City, Sears and Sports Authority, among others.
The company played a leading role in some of those store closures, including for Sports Authority where it sold inventory, furniture, fixtures and equipment at all of its 450 U.S. locations after Sports Authority filed for bankruptcy. in 2016. In other cases, Gordon Brothers had a more limited role, such as for Sears where it only oversaw the closing of sales of Sears stores in Canada.
Locally, Gordon Brothers helped Ephrata Borough-based Doneckers liquidate assets in 2008 when it closed the restaurant, bed and breakfast and home decor and furniture stores that had been an institution since the 1960s.
In some cases, Gordon Brothers has maintained a company’s brand after its durable assets have been sold. Linens ‘n Things was relaunched as an online-only brand after Gordon Brothers helped liquidate over 500 of the chain’s retail stores in 2008. And Gordon Brothers helped Sharper Image reemerge as a licensing structure after that the catalog seller of futuristic gadgets, electronics and massage chairs sold all of its durable assets in 2008.