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2020-11-20
2020-11-20
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 20, 2020
ARMSTRONG WORLD INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
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Pennsylvania
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1-2116
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23-0366390
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(State or other jurisdiction
of incorporation or organization)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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2500 Columbia Avenue P.O. Box 3001
Lancaster, Pennsylvania
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17603
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code: (717) 397-0611
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(Former name or former address if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading
Symbol(s)
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Name of each exchange on which registered
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Common Stock, $0.01 par value per share
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AWI
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New York Stock Exchange
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
Section 8 – Other Events
Item 8.01. Other Events
On November 19, 2020, Armstrong World Industries, Inc. (“AWI,” the “Company,” “we,” “our,” or “us”) entered into an Equity Interest Purchase Agreement (the “Purchase Agreement”) to purchase 100% of the equity of Arktura LLC, a Delaware limited liability company (“Arktura”), by and among Arktura, its individual founders (each a “Seller”) and certain affiliated entities. Arktura is a Los Angeles-based design and manufacturing company of architectural systems and custom solutions in the ceiling and wall industries. Arktura has projected 2020 revenues and adjusted EBITDA of approximately $37 million and $12 million, respectively. Pursuant to the terms and subject to the conditions set forth in the Purchase Agreement, the Company will purchase Arktura and its subsidiaries comprising Arktura’s business and operations in the United States and Argentina for a purchase price consisting of $91 million payable in cash at the closing of the transactions contemplated thereby, plus an additional $24 million of deferred cash payments to be made over a period of five years and an additional $6 million of common stock of AWI to be issued over a period of five years, in each case subject to the applicable Seller’s continued employment with AWI. The purchase price is subject to certain customary adjustments for cash, indebtedness, transaction expenses and net working capital. AWI expects to fund the acquisition with its revolving credit facility and available cash.
Consummation of the transaction is subject to various customary closing conditions, including but not limited to expiration or termination of the waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The foregoing description of the Purchase Agreement and the transactions contemplated thereby does not purport to be complete.
Section 7 – Regulation FD
Item 7.01 Regulation FD Disclosure.
On November 20, 2020, the Company issued a press release announcing its entry into the Purchase Agreement. A copy of the press release is furnished herewith as Exhibit 99.1. The information contained in this Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed by the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.
Caution Concerning Forward-Looking Statements
This Current Report on Form 8-K includes certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Such forward-looking statements include, but are not limited to, statements about the plans, objectives, expectations and intentions of AWI, and other statements that are not historical facts. These statements are based on the current expectations and beliefs of AWI’s management, and are subject to uncertainty and changes in circumstances. AWI cautions readers that any forward-looking information is not a guarantee of future performance and that actual results may vary materially from those expressed or implied by the statements herein, due to changes in economic, business, competitive, technological, strategic or other regulatory factors, as well as factors affecting the operation of the business of AWI. More detailed information about certain of these and other factors may be found in filings by AWI with the Securities and Exchange Commission (the “SEC”), including its most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q in the sections entitled “Caution Concerning Forward-Looking Statements” and “Risk Factors.” Various factors could cause actual results to differ from those set forth in the forward-looking statements. AWI is under no obligation to, and expressly disclaims any obligation to, update or alter the forward-looking statements contained in this document, whether as a result of new information, future events or otherwise.
Section 9 – Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
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(d) Exhibits
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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ARMSTRONG WORLD INDUSTRIES, INC.
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By:
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/s/ Mark A. Hershey
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Mark A. Hershey
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Senior Vice President, General Counsel, Secretary and Chief Compliance Officer
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Date: November 20, 2020
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Exhibit 99.1
Armstrong World Industries, Inc. to Acquire Arktura
LANCASTER, Pa., November 20, 2020 – Armstrong World Industries, Inc. (NYSE: AWI) today announced it has entered into an agreement to acquire Arktura, LLC, a designer and fabricator of ceilings, walls, partitions and facades based in Los Angeles, California. Founded and led by architects and designers, Arktura is a leader in architectural specialty metal and felt solutions recognized for fusing ingenuity and creativity with leading edge technologies and software to deliver visionary design.
“The Arktura team is widely celebrated for bridging the gap between creative intent and manufacturing capabilities to bring about exceptional ceiling and wall designs for any kind of space,” said AWI CEO Vic Grizzle. “Consistent with our strategy to drive profitable growth, Arktura will help us reach a whole new level of design excellence, within both our architectural specialties and mineral fiber segments. We are excited about the possibilities ahead for our teams to collaborate and create innovative solutions that make a positive difference where we live, work, learn, heal and play.”
In connection with the transaction and subject to closing, AWI and Arktura also plan to form and launch Arktura Ventures LLC, an incubator for exploring and accelerating new product, technology and materials solutions in architecture, design, engineering and construction, above and beyond their existing core businesses. Arktura Ventures is expected to be co-managed and co-led by representatives from both organizations, with AWI maintaining majority ownership and control. Arktura Ventures would complement AWI’s strategic growth initiatives, including its digitalization, business development and sustainability platforms.
Arktura CEO Chris Kabatsi said, “Kevin Kane, Rob Kilian and I look forward to completing the transaction and joining Armstrong. With our combined resources, we see the opportunity to redefine what is possible and create truly transformative products and systems in the architectural space for the pandemic environment and beyond. With Armstrong, we have found a company with an incredible history and management team, and we are thrilled to be embarking on this journey of innovation and sustainability with them.”
The transaction remains subject to customary closing conditions, including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and is currently expected to close prior to the end of the calendar year. Following closing, Arktura is expected to become a wholly-owned subsidiary of AWI and to retain its company name, brand, organizational structure and employee base, while continuing to sell through its current independent sales network, which has been integral to Arktura’s success and growth.
Arktura has projected 2020 revenues of approximately $37M. AWI expects to fund the acquisition with its revolving credit facility and available cash.
Armstrong World Industries
2500 Columbia Avenue, Lancaster, PA 17603
717.397.0611 | www.armstrongceilings.com
About Armstrong World Industries
Armstrong World Industries, Inc. (AWI) is a leader in the design and manufacture of innovative commercial and residential ceiling, wall and suspension system solutions in the Americas. With over $1 billion in revenue in 2019, AWI has approximately 2,500 employees and a manufacturing network of 14 facilities, plus 5 facilities dedicated to its WAVE joint venture.
Uncertainties Affecting Forward-Looking Statements
Disclosures in this release and in our other public documents and comments may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements provide our future expectations or forecasts and can be identified by our use of words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "outlook," "target," "predict," "may," "will," "would," "could," "should," "seek," and other words or phrases of similar meaning in connection with any discussion of future operating or financial performance. Forward-looking statements, by their nature, address matters that are uncertain and involve risks because they relate to events and depend on circumstances that may or may not occur in the future. As a result, our actual results may differ materially from our expected results and from those expressed in our forward-looking statements. A more detailed discussion of the risks and uncertainties that could cause our actual results to differ materially from those projected, anticipated or implied is included in the “Risk Factors” and “Management’s Discussion and Analysis” sections of our reports on Forms 10-K and 10-Q filed with the U.S. Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made. We do not undertake or assume any obligation to update or revise any forward-looking statements beyond what is required under applicable securities law.
Armstrong World Industries
2500 Columbia Avenue, Lancaster, PA 17603
717.397.0611 | www.armstrongceilings.com