Mohawk purchases global tile manufacturer

Carpet manufacturer Mohawk Industries has entered into a definitive agreement to acquire the Marazzi Group, a worldwide maker and marketer of ceramic tile, for $1.5 billion in cash and equity. The deal is expected to close during the first quarter of 2013. 

The Marazzi Group is held by the Marazzi family and two private equity funds -- Permira and Private Equity Partners. It operates in most major geographies, including Russia, the United States, Italy, France,  Spain, China and Mexico. Marazzi's 2011 revenues were approximately $1.16 billion.

Marazzi distributes ceramic tile in more than 100 countries through a strong international sales force, which will increase Mohawk's worldwide growth.

Marazzi has the No. 1 position in the Russian ceramic market, the announcement said. The company operates two manufacturing sites and 21 regional distribution centers. Marazzi owns and franchises more than 300 retail stores that carry only Marazzi products. About 50% of the Marazzi Russian business is sold directly to end users, and the retail advertising done by the stores has created a strong consumer brand

In the United States, Marazzi's products are sold through independent distributors, home centers and a few company service centers. Leveraging the combined manufacturing expertise, design capabilities and distribution systems, the company hopes to grow its ceramic business.

Jeff Lorberbaum, Mohawk's chairman and CEO, said in a prepared statement: "This acquisition represents the next step in the expansion of Mohawk's global business and will make Mohawk a stronger company. We found Marrazi attractive because of its solid management team and leadership positions in the United States, Russia and Europe. Marazzi's differentiated products, leading-edge design, efficient manufacturing and exemplary service have created one of the most valued brands in the industry. We have many opportunities to improve results by leveraging best practices, operational expertise, product innovation and manufacturing assets."