LL Flooring receives acquisition proposal
LL Flooring Holdings, Inc. announced that it has received an unsolicited, non-binding proposal from Cabinets To Go, LLC, a subsidiary of F9 Brands, Inc.
Cabinets To Go has proposed to acquire all of the outstanding shares of LL Flooring at a price of $5.76 per share. The price of LL Flooring shares fell 7.17% to a price of $4.14 at the close of the market on May 30.
The offer from Cabinets To Go represents more than a 39% premium per share.
The LL Flooring Board of Directors plans to review and consider the proposal in the context of LL Flooring’s strategic plan “to determine the course of action that it believes is in the best interests of its shareholders.”
LL Flooring said it does not intend to comment further on Cabinet To Go’s unsolicited proposal until its board of directors has completed a review.
J.P. Morgan Securities LLC is serving as a financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor to the LL Flooring.
Cabinets To Go is a cabinet retail chain that offers cabinets for kitchen and bath, laundry rooms, mudrooms, and garages. The retailer operates more than 100 stores across the country.
LL Flooring, the former Lumber Liquidators, reported sales for the first quarter 2023 declined 13.7% to $240.7 million compared to sales of $279 million for the first quarter last year.
The retailer's President and CEO Charles Tyson described the first quarter as "challenging."
In reporting its first quarter results, Tyson also said, "Despite the headwinds that we are facing, we remain confident in our ability to deliver the high-touch service of an independent flooring retailer combined with the value, assortment and convenience of a national brand."
The hard-surface flooring retailer also reported posted a net loss of $10.6 million for the quarter. In the prior first quarter, the company reported a net income of $4 million. LL Flooring also reported an operating income loss of $13.2 million.
In a prepared statement, LL Flooring said it “believes that that the long-term fundamentals” of its business are strong.
Additionally, the retailer said that it is “well-positioned to take advantage of the medium- to long-term tailwinds for repair and remodel spending, and believes that the company’s unique positioning differentiates it from others in the market.”
Based in Richmond, Va., LL Flooring operates 440 stores nationwide.
