With Wednesday morning’s announcement of Engineered Floors' plans to buy "substantially all of the operating assets of Beaulieu Group LLC," an industry insider said that in less than a decade Engineered Floors has entrenched itself clearly in the “big three.”
Ken Ryan, senior editor with Floor Covering News, said while Shaw Industries and Mohawk Industries are still at the top, Dalton-based Engineered Floors is now on their heels.
“It really is amazing how Engineered Floors has risen since 2009 to be such a major player in such a short time,” Ryan said. “Now, to talk about the big three, it is Shaw, Mohawk and Engineered Floors, and there is now no doubt about that.”
Engineered Floors, founded by Robert E. “Bob” Shaw — who was the co-founder and longtime head of Shaw Industries leading up to its sale to Warren Buffett's Berkshire Hathaway in 2001 — said it had “reached a letter of intent agreement in principle to purchase substantially all of the operating assets of Beaulieu Group LLC,” which filed for bankruptcy in July.
“The transaction will be contingent upon approvals through the bankruptcy court and due diligence processes,” the statement said. “Pending governmental approvals, the transaction is expected to close in the fourth quarter of 2017.”
Financial details of the deal were not included, and there was no mention of what the future will hold for current Beaulieu employees. Bob Shaw's office said he would have no comment on Wednesday, and messages left for executives at both Beaulieu and Engineered Floors were not immediately returned Wednesday afternoon.
“It is exciting news,” said Don Rountree with the public relations firm Rountree Group, which put out the announcement. “I do know they don’t have a whole lot to say right now other than what was put in the release.”
The move comes about two months after Beaulieu announced plans for a restructuring of the company following chapter 11 bankruptcy. In August, company officials acknowledged there would be an elimination of 170 positions, mainly in management.
The move also comes some four months ahead of the planned opening of a 520,000-square-foot carpet tile manufacturing facility in south Whitfield County by Engineered Floors. The plant is expected to open in January.
Engineered Floors currently employs some 3,000 people. It has a 650,000-square-foot facility in Calhoun and an 800,000-square-foot facility on South Dug Gap Road in Dalton.
This is the second major local acquisition by Engineered Floors in recent years. In 2015 the company acquired Dalton-based J+J Flooring, which it runs as a separate division. Ryan said the acquisition and current business model employed by Engineered Floors with respect to J+J could be a blueprint for how Beaulieu will look moving forward.
“Looking at J+J is exactly right, I think, if you want to see the future,” Ryan said. “I kind of look at what they did with J+J and let them be J+J, and to a large degree, how they go to market and move forward, they will let Beaulieu be Beaulieu. They (Beaulieu) have some brands that are doing well, and it would just be another brand under the Engineered Floors umbrella.”
Beaulieu is privately owned and manufactures and distributes carpet, engineered hardwood and laminate and luxury vinyl tile (LVT) flooring. Before the reorganization plans were announced, it had some 2,500 employees in 12 locations, mostly in northwest Georgia. Its corporate headquarters are in Dalton, and three plants and a distribution center are in Whitfield County.
Even with the restructuring, Ryan said rumbles of some sort of move with Beaulieu were well-known in the industry.
“I don’t know that Beaulieu would have survived without someone coming in,” Ryan said. “In this case, they have a partner that is blazing new trails and growing at an incredible rate. Engineered Floors continues to amaze. They quickly rose to No. 3, and they are a tremendous force in the Dalton area. I think it is great for the industry down there that Bob has done this. He is a legend and he continues to burnish those credentials.”
Rob Bradham, Greater Dalton Chamber of Commerce president and CEO, said the agreement could help retain some local jobs.
"It sounds like Engineered Floors and Beaulieu came to an agreement that made sense for everybody," he said. "We are hoping this deal will save some local jobs and continue to have our local economy doing well.”