EXHIBIT 99.1
ARMSTRONG WORLD INDUSTRIES TO ACQUIRE TRIANGLE PACIFIC CORP. FOR $55.50 PER
SHARE IN TRANSACTION VALUED AT $890 MILLION
- --Transaction Will Make Armstrong the World Leader in Wood Flooring--
LANCASTER, PA, AND DALLAS, TX, JUNE 13, 1998 -- Armstrong World Industries,
Inc., (NYSE:ACK) and Triangle Pacific Corporation (NASDAQ:TRIP) announced today
that they have signed a definitive merger agreement for Armstrong to acquire all
the outstanding shares of Triangle Pacific Corporation at a price of $55.50 per
share, or a total of approximately $890 million in cash on a fully diluted
basis. Triangle Pacific is the leading manufacturer of hardwood flooring
products and a substantial manufacturer of kitchen and bathroom cabinets.
Including the assumption of Triangle Pacific's net debt of about $260 million,
the total value of the transaction will be $1,150 million.
Following the combination and the completion of the pending acquisition of DLW,
Armstrong will become the world's leading manufacturer of hard surface flooring.
The transaction has been unanimously approved by the Boards of Directors of both
companies. Armstrong will commence a cash tender offer for all outstanding
Triangle Pacific shares for $55.50 per share within five business days. The
offer is contingent upon a majority of the shares on a fully diluted basis being
tendered and other customary conditions. Certain principal stockholders of
Triangle Pacific have agreed to tender their shares into the offer (representing
approximately 35% of Triangle Pacific's outstanding common stock on a fully
diluted basis). The tender will be followed by a merger in which any untendered
shares will be converted into the right to receive the same price in cash. The
agreement is not subject to any financing condition, and Armstrong has already
received bank commitments from J.P. Morgan, Chase Manhattan, and Bank of
America.
George A. Lorch, Chairman and Chief Executive Officer of Armstrong, said,
"Triangle Pacific is one of the best companies in the building materials
industry, and this acquisition will mark a major addition to Armstrong's core
flooring business. Together with the announcement just last week of our
agreement to acquire DLW, the third largest flooring manufacturer in Europe,
Triangle Pacific will make Armstrong the preeminent manufacturer of flooring
products worldwide. Importantly, both announcements reaffirm our commitment to
be a major force in the consolidating global building materials industry.
"Hardwood flooring comprises 7 percent of the U.S. flooring market and is one of
the most rapidly growing segments. Hardwood flooring is increasingly being
chosen by residential purchasers willing to spend more in order to obtain wood
flooring's beauty and durability. Triangle Pacific is clearly the leader in
this area, with its highly regarded brands, outstanding manufacturing
technology, low cost producer status, broad and innovative product line, and its
excellent reputation for value and service."
Triangle Pacific sells three types of flooring products--solid hardwood,
engineered hardwood, and laminate--which together account for approximately 72%
of its revenues. Its brands include Bruce, the leading name in hardwood
flooring, as well as Hartco, Robbins, Premier, and Traffic Zone. In total,
Triangle Pacific accounts for approximately 46% of the U.S. hardwood flooring
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segment. Triangle Pacific is also a substantial manufacturer of cabinets for
kitchens and bathrooms, targeted primarily toward the relatively higher-end,
single-family and multi-family markets. Cabinets account for approximately 28%
of Triangle Pacific's revenues.
Lorch said, "Triangle Pacific has also been guided by an outstanding management
team, led by Floyd Sherman, and we are pleased that they will join the combined
company."
Mr. Sherman, current Chairman and CEO of Triangle Pacific, will play an
important role in developing and implementing the growth plan, and will become
President, Wood Flooring and Cabinet Operations at Armstrong, reporting directly
to Armstrong's Chairman and CEO.
Lorch continued, "The combination of Armstrong's and Triangle Pacific's
strengths will provide an excellent strategic platform for additional profitable
growth. Armstrong will support Triangle Pacific's future growth consistent with
their current plans. In addition, significant new growth opportunities exist in
the commercial and international markets, and we expect to capitalize on
Armstrong's existing presence in these markets. Internationally, for example,
particularly in Europe, Canada and Japan, wood generally commands a much higher
share of the flooring market than in the U.S.
"In addition to the sales opportunities, we will also be able to achieve
significant cost savings in logistics and marketing in the combined company.
Armstrong plans to invest in brand development, capacity, technology, and new
products and systems to support the growth of wood flooring around the world,"
Lorch said. While a coordinated approach to marketing wood and vinyl products
is envisioned, there are no plans to eliminate or change any brands or
distribution systems.
Floyd Sherman, Chairman of Triangle Pacific, said, "We are very pleased to have
entered into this agreement. For our shareholders, it offers excellent value
and an attractive premium for their shares. For Triangle employees, customers
and suppliers, it provides a strong future as part of the preeminent name in the
flooring industry, under a management that has been squarely focused on how to
make their company efficient, innovative and customer-driven."
Armstrong expects that the two recently announced acquisitions, Triangle Pacific
and DLW, will be modestly dilutive to earnings in 1998, but accretive beginning
in 1999. The company also expects to earn in excess of its cost of capital on
both investments.
"We continue to transform Armstrong into a growth and results-oriented,
financially strong and highly efficient manufacturer and marketer of name
brands, offering around the globe the kinds of products and values that
customers want," Lorch concluded. Upon completion of the two transactions,
Armstrong will have total flooring sales of $2.1 billion, with about 57% in
vinyl, 23% in hardwood, 14% in European carpet, and 6% in linoleum. Consolidated
sales will be approximately $3.5 billion with about 60% in floor products.
In fiscal year 1997, Triangle Pacific had total revenues of $652.9 million.
Headquartered in Dallas, Texas, it has a total of 5,400 employees. Flooring
products accounted for $469.1 million of 1997 sales, and have grown at a
compounded annual rate of 26% since 1991. Net income in 1997 of $31.8 million
has grown at a compounded annual rate of 19% since 1994. Triangle Pacific
manufactures all of its flooring products in the U.S. in 15 plants in 11
geographically diverse locations, except for its Coastal Woodlands branded
products which are imported from Indonesia, Traffic Zone laminate products which
are imported from Germany, and a very limited amount of teak parquet imported
from Thailand. Imported products accounted for around 3% of total units sold in
1997.
Triangle Pacific's kitchen and bathroom cabinets are manufactured in
approximately 100 different styles and colors and marketed under the Bruce and
IXL brand names. The company operates four cabinet manufacturing plants
throughout the U.S. Sales in 1997 were $183.8 million, for a U.S. market share
of approximately 3%.
J.P. Morgan acted as financial advisor for Armstrong and Salomon Smith Barney
acted as financial advisor to Triangle Pacific in this transaction.
Armstrong World Industries is a global leader in the design, innovation and
manufacture of interior finishing solutions, most notably floors and ceilings.
It is also a world leader in the innovation and manufacture of pipe insulation,
gasket material and textile machine parts. Based in Lancaster, PA, Armstrong
has approximately 10,600 employees worldwide. In 1997 its net sales totaled
$2.2 billion.
Note: Safe Harbor Statement under the Private Securities Litigation Reform Act
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of 1995:
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This press release contains forward-looking statements regarding Armstrong World
Industries, Inc.'s results and trends in its business. These statements are
based largely on the company's expectations and are subject to a number of risks
and uncertainties, many of which are beyond the company's control. Such risks
include the successful consummation of the tender offer, managements' ability to
integrate the company's flooring operations with Triangle Pacific, the company's
ability to achieve the anticipated economies of scale and profitability margins
and employee satisfaction with the transactions, among others. These risks and
uncertainties could cause actual results to differ materially from those in the
forward-looking statements. We also refer to the company's filings with the
Securities and Exchange Commission, which include descriptions of additional
risks and uncertainties.
SOURCE Armstrong World Industries
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