CVC Capital Partners is in talks on a possible takeover of Desso, the European textiles and sports flooring division of Armstrong DLW AG, part of US-based Armstrong Holdings Inc.
A CVC bid would be a timely one for the group. In December, Armstrong World Industries Inc., the operating unit for Armstrong Holdings, filed for Chapter 11 protection to resolve its asbestos liability. Financial results will be disclosed in March 2000.
Chairman and CEO of Armstrong World Industries Michael D. Lockhart said he does not expect economic conditions to improve in 2001 and that Armstrong expects revenues to remain fairly flat, and operating income, excluding the effects of asbestos and reorganization charges, to decline from 2000 levels.
Although the proposed terms of the deal have not been disclosed, an Armstrong Holdings statement says that the company is looking at the accounting for the proposed deal and expects ‘that there could be a net loss on disposal of approximately $30m-$35m before any tax benefit’.
Gerard Glenn, president and CEO of Armstrong DLW, said: “An acquisition by CVC would enable Desso to receive the investment it needs to grow and better serve its customers and employees.”
Desso manufactures commercial carpet and artificial sports flooring in the Netherlands, Germany and Belgium. In 1999 it had annual sales of approximately $313m. It has around 1,300 employees.