CALHOUN, Ga. — Shares of tile maker Dal-Tile International Inc. soared 24 percent Tuesday on news the company has agreed to a $1.4 billion buyout by carpetmaker Mohawk Industries Inc.
Under the deal, announced late Monday after both companies' boards unanimously approved, Mohawk will also assume $261.7 million in Dal-Tile debt.
Calhoun-based Mohawk is a leading producer of woven and tufted broadloom carpet and rugs, with brands including Mohawk, Aladdin, Bigelow, Custom Weave, Durkan and Galaxy. It has 24,500 employees.
Dal-Tile is the largest manufacturer, distributor and marketer of ceramic tile in the United States, and one of the largest in the world. Headquartered in Dallas, it has 7,500 workers in North America and sells products under the brand name Daltile and American Olean.
Under the terms of the merger agreement, Dal-Tile stockholders will receive approximately 50 percent in cash and 50 percent in stock, comprised of $11 in cash and .2414 shares of Mohawk common stock for each share of Dal-Tile common stock.
Based on the closing price of Mohawk stock on Monday, Dal-Tile shareholders would receive equivalent value of $23.10 per share in cash and Mohawk stock.
"The Dal-Tile merger gives us the opportunity to expand our hard surface business and become a leader in the ceramic tile sector," said Jeffrey S. Lorberbaum, president and CEO of Mohawk.
Jacques R. Sardas, chairman and chief executive of Dal-Tile, said the combined company "will have the opportunity to create a formidable organization in the floor covering industry."
The deal is expected to be completed by the first quarter of 2002 pending shareholder and regulatory approval.