Floor with LVT (Courtesy of Nox)

STIC to buy Korean flooring firm Nox from TPG for $336 mn
STIC to make Nox’s Ho Chi Mihn factory its main production base to boost price competitiveness against Chinese rivals.

Seoul-based private equity firm STIC Investments has agreed to acquire global leading luxury vinyl tile (LVT) flooring firm Nox Corp. at 450 billion won ($336 million) from US alternative investment manager TPG Inc.

STIC signed a stock purchase agreement (SPA) to purchase a 65% stake in South Korea’s Moleem Corp., the parent of Nox, from TPG on Aug. 16, according to investment banking industry sources in Seoul. The South Korean private equity firm, which was selected as a preferred bidder in April, plans to raise the money for the deal through a fund worth about 2 trillion won established last year.

Moleem’s entire stake was estimated at slightly more than 700 billion won, the sources said.

GLOBAL BUSINESS

Nox founded in 1994 reported an operating profit of 31 billion won based on sales of 259.1 billion won last year. The company generated 90% of its total sales from overseas markets, especially the US and Europe.

Nox is the world’s top player in the commercial LVT industry with a market share of some 20%.

The global LVT sector was forecast to grow 12% a year on average by 2028 since the tiles are rapidly replacing the existing flooring products such as carpets and wood due to their better quality, durability and lower cost.

Luxury hotels, which long had carpets, increased the use of LVT as COVID-19 raised hygiene awareness. The lounge of Paris Charles de Gaulle Airport and Hermès boutiques in the French capital also installed LVT flooring.

Nox faced growing competition from its Chinese rivals, which sell the products at 20% lower prices than the South Korean company.

STIC plans for Nox to focus on premium lineups while making its factory in Ho Chi Minh City the company's main production facility to boost price competitiveness with lower labor costs there.

The company’s South Korean plant is set to concentrate on manufacturing various models in small quantities, while its US facility in Ohio is likely to benefit from Washington’s push for reshoring.

Source: kedglobal.com