Floor & Decor Inks Deal to Fast Track Growth
Hard surface flooring specialty retailer Floor & Decor is looking to boost its success in the commercial market with the acquisition of Spartan Surfaces.
“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,” says Floor & Decor CEO, Tom Taylor. “The addressable commercial market is large at an estimated $13 billion US, 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.”
The deal involves the 100 per cent acquisition of Spartan Surfaces for a consideration of up to $90 million US. A portion of the consideration will be paid through 2024, based on the achievement of predefined fiscal performance goals. The arrangement will be financed with cash-on-hand and $5 million US worth of Floor & Decor common stock.
Spartan Surfaces will operate as a subsidiary of Floor & Decor Holdings Inc., and will continue to be led by its senior management team.
“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,” says Spartan Surfaces founder and CEO, Kevin Jablon. “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, while maintaining our unique culture.”
The deal is expected to close in the second quarter of 2021.