KANKAKEE — Armstrong Flooring Inc., which has operated a manufacturing location in Kankakee for many years, has entered into a contract to sell its company, and it was announced the Kankakee location will remain open.
In a Sunday announcement, Armstrong said it had entered into a binding “asset purchase agreement” with a consortium of buyers consisting of AHF LLC and Gordon Brothers.
The group will acquire substantially all of Armstrong Flooring’s North American assets for $107 million in cash and assumption of specified liabilities, according to published reports.
The Kankakee plant is at 1401 N. Hobbie Ave. The company employs some 350 people at the site.
The Kankakee plant operates seven days per week. The location manufactures floor tiles.
The deal must be approved by a Delaware bankruptcy court judge before it’s final. A hearing on the sale is set for Tuesday.
Armstrong Flooring said the deal will keep its Pennsylvania-based plants, as well as the Kankakee plant, operating. It is not clear how the sale will affect employees.
Armstrong said when it filed for bankruptcy in May that it owes an estimated $318 million, including $160 million in long-term debt. It previously received court approval to sell off its assets it values at $517 million.
“We have been working hard to execute an efficient and value-maximizing sale of the business while keeping the best interests of our valued stakeholders at the forefront of all that we do,” said Michael Vermette, president and CEO of Armstrong.
“In light of the agreement we have reached ... and the agreements we are close to signing with the buyers of the Chinese and North American businesses following consummation of the auction, Armstrong Flooring is now one step closer to achieving that goal,” Vermette said.
The auctions for the sale of Armstrong’s Chinese and Australian businesses have not yet formally concluded. Armstrong said those negotiations should conclude in the near term.
Pending the sale’s closure, Armstrong will continue to operate as usual in all North American locations and remain committed to its customers and other stakeholders.
“We believe this transaction represents tremendous opportunity for both AHF Products and our channel partners and continues our growth as a leader in the flooring industry,” said Brain Carson, president and CEO of AHF Products, in an email statement to LNP, LancasterOnline.
Gordon Brothers, a 119-year-old business, has 30 offices across five continents and helps distressed businesses manage a variety of strategic or financial difficulties.