Floor & Decors to come out with a $1 billion IPO

The U.S. new housing and housing repairs sector has, of late, seen robust growth.

According to sources familiar with the matter at hand, Floor & Decor Holdings Inc, a U.S. based tile and flooring retailer, is getting ready to launch an initial public offering (IPO) which could place it in the $1 billion, (including debt) value bracket.

Sources reveal that the company, whose earnings before interest, tax, depreciation and amortisation (EBITDA) in the last 12 months was $100 million, has interviewed several investment banks as underwriters of its upcoming IPO.

The move marks confidence in the United States’ recovering primary market.

Sources opted for the cover of anonymity since the preparations and deliberations are confidential and still private.

When asked to respond to requests for comments, Floor & Decor and Ares Management LP (ARES.N) and Freeman Spogli & Co, its private equity owners, declined comment.

Smyrna, Georgia-based Floor & Decor provides laminate and natural stone flooring, wood, tiles along with other decorative accessories. It operates 65 warehouses-like stores across the U.S.

Floor & Decor was founded in 2000. In 2010 it was acquired for an undisclosed amount by Ares and Freeman Spogli from an investor group which included TWJ Capital LLC, Najeti Ventures LLC and Saugatuck Capital Co.

So far, the company has escaped pressures from online retail giant Amazon.com since most of its customers prefer an expert in-person guidance for their purchase of flooring and tools.

The floor industry is closely tied to the U.S. new housing and housing repair sectors. Of late, the housing industry in the U.S. has seen robust growth as a tightening labour market has seen wages shooting up.

In September, Moody’s Investors Service Inc said, Floor & Decor’s everyday-low-pricing offerings should see position it well in the current economic environment.


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