Mohawk granted regulatory approval to buy KAI Group

Two years since the acquisition of Marazzi, the American giant Mohawk Industries (Calhoun, Georgia) is continuing to expand in the ceramic tile industry and now has its sights set on Southeast Europe.

On 8 April, the Bulgarian regulatory watchdog granted its approval for the acquisition of KAI Groupby Mohawk Foreign Acquisitions (a unit of Mohawk Industries) from the investment fund Advent International. According to KAI Group's CEO, Spas Shopov, the 195 million euro acquisition will be finalised within around a month after gaining approval from the regulatory bodies in a number of other countries.

With consolidated 2014 revenues of around 80 million euros, two factories (Khan Asparuh in Isperih and Khan Omurtag in Shumen) and an annual capacity of around 20 million sq.m, KAI Group is the largest floor and wall tile producer in Bulgaria and indeed anywhere in the Balkan peninsula. The group also has operations in Romania (KAI Ceramics) and Greece and exports more than half its output to 25 countries. Its largest markets are Great Britain, France, Germany, Italy, Benelux, Scandinavia and the Balkans.

Mohawk Industries is the leading global manufacturer of flooring materials (carpet, rugs, ceramic tile, laminate, wood, stone and vinyl flooring) produced by internationally recognised brands including American Olean, Bigelow, Daltile, Durkan, Karastan, Lees, Marazzi, Kerama Marazzi, Mohawk, Pergo, Unilin and Quick-Step. Besides the United States, the group has operations in Canada, Mexico, Brazil, Europe, Russia, India, China, Malaysia and Australia.

In 2014 Mohawk Industries reported net sales of $7.8 billion (6% up on 2013 or 7% on a constant exchange basis) and net earnings of $532 million (a big increase compared to the $349 million to 31/12/2013).

One of the major operations with which the American multinational began 2015 was the announcement in January of the acquisition of IVC Group, the Belgian leader in the vinyl and laminate flooring sector with operations in Europe and the United States and sales of approximately $700 million. The transaction, worth about $1.2 billion, will enable Mohawk to expand in the LVT (Luxury Vinyl Tiles) segment, which grew globally by around 18% in 2014. LVT now represents about 5% of the total US flooring market, and sales are projected to grow more than 15% annually through to the end of the decade.