Lakeland, Fla.—Florida Tile has finally found a home. Panariagroup Industrie Ceramica, a publicly-traded Italian tile conglomerate, announced it purchased the brand and main assets of Florida Tile Industries for $22.5 million.
The agreement was reached with Mile-stone Capital Partners, a Washington, D.C.-based private equity fund, which had owned Florida Tile since late 2003 (FCNews, Nov. 24/Dec. 1) after acquiring it from Illinois Tool Works.
With its sale to Panariagroup, it marks the first time in approximately 20 years the operation will be owned by a company whose sole interest is tile.
“Panariagroup is a great company,” said Buck Burwell, Florida Tile’s CEO, who along with the rest of the manufacturer’s senior management, will remain on board. “It’s a public company but family controlled, so it gives us consistency and continuity. For our employees, it makes them part of a larger, stronger company because it is only focused on tile. It’s a great opportunity for everyone.”
Florida Tile, which has been in business since 1954 and is one of the largest producers of glazed ceramic tile in the U.S., will operate as one of Panariagroup’s wholly owned subsidiaries, of which it has a handful of others, all of whom are tile manufacturers.
In addition to having two manufacturing facilities in the U.S.—Shannon, Ga., and Lawrenceburg, Ky.,—Florida Tile operates more than two dozen branches across the country and also has a distribution network of 60 independent wholesalers.
For Panariagroup, the acquisition gives it a major entryway into the lucrative U.S. market. While some of its divisions already do business here, it pales in comparison to the foothold Florida Tile has in terms of facilities, distribution and logistics.
Burwell noted, “there are obvious synergies they are interested in, and not just with our manufacturing capabilities, but our branches and distribution. This is a platform for it to get in the U.S.
“Fact is,” he added, “everyone wants to be in this country, but logistics is the name of the game, especially in the building materials industry. In order to truly be successful, you can’t just ship material, you need a presence here. And not just warehousing, but a sales organization, marketing, customer service, etc.”
Though this deal comes just three months after purchasing Novagres, a leading ceramic manufacturer and distributor in Portugal, for approximately $48 million, Guiliano Mussini, Panariagroup’s chairman, called Florida Tile “a very important investment, not only in manufacturing but also in logistics and distribution. Creating from scratch an organization like the one acquired would have required far higher investments and time.”
While Florida Tile will continue to operate as it did prior to the acquisition, Burwell does expect its portfolio to be expanded with the infusion of some products by Panariagroup. “The marketing details have yet to be worked out, but it makes sense. Its other brands have good reputations in Europe. It would be a great addition to what we carry since the Italians are the best in the world in making product.
“And,” he continued, “when you combine it with our strengths in distribution and market presence, it makes a pretty good one-two punch.”
Mussini agreed. “In the short term, we will proceed with partial substitution and integration of sourced products with products from our Italian and Portuguese plants with the aim of elevating market positioning and profitability.”
In addition to products, Burwell said Panariagroup will invest in Florida Tile’s manufacturing plants. “We’re not sure exactly what and how much but it will most likely be in the form of additional capacity and technological, with the possibility of having in-house porcelain capabilities.”
Mussini added, “we forecast the reorganization and the enlargement of at least one the two production plants aimed at the introduction of state-of-the-art technologies that would enable to reach superior productivity, technical and aesthetic features of the products and further enrichment of the catalogue.”
Along with Panariagroup’s other brands—Lea Ceramiche, Cotto d’Este, Fiordo Industrie Ceramiche, Margrés and Novagres—all of which will continue to operate independently, the company now operates seven manufacturing plants—three in Italy, and two each in the U.S. and Portugal—seven brands and 1,900 employees.
“With this acquisition,” Mussini concluded, “our group will become one of the most important players in the U.S. ceramic market, guaranteeing outstanding possibilities of growth in both dimension and profitability.”
For more information, call Florida Tile at 863/687-7171.