ICS Magazine

Mohawk Industries set to merge with Dal-Tile International

November 20, 2001
Mohawk Industries, Inc. has agreed to a $1.6 billion merger deal with and Dal-Tile International Inc.

CALHOUN, Ga. -- Mohawk Industries, Inc. (NYSE:MHK) and Dal-Tile International Inc. (NYSE:DTL) are merging, a transaction valued at approximately $1.663 billion, including the repayment of approximately $261.7 million in Dal-Tile debt.

The leading producer of woven and tufted broadloom carpets and rugs for residential and commercial applications and the Dallas, Texas-based manufacturer, distributor and marketer of ceramic tile announced a definitive agreement for Mohawk to acquire Dal-Tile.

Mohawk will give Dal-Tile stockholders 50 percent in cash and 50 percent in Mohawk stock, comprised of $11 in cash and .2414 shares of Mohawk common stock for each outstanding share of Dal-Tile common stock.

The boards of both companies unanimously approved the merger, which remains subject to stockholder approval at each company, regulatory approvals and other customary closing conditions. The cash portion of the transaction, estimated to be completed by the first quarter of 2002, will be financed through a combination of existing Mohawk credit facilities and new debt.

"The Dal-Tile merger gives us the opportunity to expand our hard surface business and become a leader in the ceramic tile sector," said Mohawk president and CEO Jeffrey S. Lorberbaum. "With approximately $1 billion of annual sales through Dal-Tile's distribution channels of company-operated service centers, independent distributors and home center retailers, we will offer the most comprehensive line of ceramic tile and stone products in the industry. Their Daltile and American Olean brands are two of the most respected brands in the industry. The strong sales growth and operating margins of Dal-Tile over the last four years reflect the superior performance of the current operating management team. We look forward to bringing Dal-Tile into the Mohawk family and to the strategic growth opportunities this merger offers."

Dal-Tile chairman and CEO Jacques R. Sardas, said, "The proposed merger represents the ideal culmination of our efforts and the dedication of all our employees, as well as the support we received from our stockholders, customers, lenders and suppliers."

According to Sardas, the combined company will create "a formidable organization in the floor covering industry. We are looking forward to the proposed merger and to becoming part of the Mohawk family. We are impressed by Mohawk's strong financial performance, their business acumen, leadership and professional management. The proposed merger will benefit Mohawk's and Dal-Tile's stockholders, customers and employees."

Mohawk designs, manufactures and markets carpet, widely recognized through its premier brand names, some of which include Mohawk, Aladdin, Karastan and Mohawk Commercial. Mohawk also offers a complete laminate product line and distributes carpet padding and ceramic tile, and markets its products primarily through retailers and commercial dealers. For additional information, visit the Mohawk Industries Web site at www.mohawkind.com.

Dal-Tile sells its products, marketed under the brand name Daltile and American Olean through a network of company-operated sales centers, independent distributors and leading retail home centers nationwide. Additional information on the company and its products is available on the Worldwide Web at www.daltile.com.