By Matthew Spieler
SALEM, N.J.—When it comes to being a diversified flooring manufacturer, Mannington Mills is right at the top of the list. As the first half of the year came to a close, the company managed to broaden its portfolio with the acquisition of Burke Industries. With both manufacturers being privately held companies, terms of the acquisition were not disclosed.

Founded by Roscoe Burke in 1942, Burke produces rubber flooring tiles, wall base, stair treads and accessories as well as adhesives at two U.S. facilities— San Jose, Calif., where the company is headquartered, and Eustis, Fla.—and markets its products under the Burke, Mercer and Endura brands. It also manufactures resilient materials for commercial roofing, defense, aerospace and other industrial applications.

With approximately 350 employees, FCNews estimates its annual sales at $60 million.

“Burke is the perfect fit with our strategic growth initiative to become a full-flooring resource for the contract sector,” said Jack Ganley, president of Mannington Commercial.

Betsy Amoroso, Mannington’s manager of communications, added when the company heard Burke was for sale last fall, officials quickly jumped at the opportunity because “we realized it was a good fit for Mannington, both strategically and culturally. Burke is a strong, respected brand in the industry and offers both new and complementary products to what Mannington already has.”

She explained the addition of rubber to Mannington’s commercial product offering is “right in line with the concept of offering our customers ‘Choices that Work’ in a broad range of hard and soft surface options.”

Ganley noted he was especially excited about the opportunities that the combined strengths of Mannington and Burke will create. “We believe by bringing increased flooring solutions to our customers, there is a strong shared future for both brands.”

In addition to product synergy, Tom Davis, Mannington’s president and CEO, feels the companies’ corporate values are also in sync. “We both rely on the value of being good people to do business with, which is exemplified not only with words, but with actions.”

To that end, he noted Burke will operate as a wholly owned subsidiary with Bob Pitman staying on as president and reporting to Ganley.

Expanding into rubber

Mannington becomes the second major resilient mill to expand into the rubber segment via acquisition in recent years. At the end of 2005, Tarkett purchased Johnsonite.

Amoroso said the acquisition dovetails with the Choices that Work strategy and complements the flooring that Mannington already has with cove and wall base, as well as other accessories. “It also adds rubber to the mix, which is a new medium for us. It allows Mannington commercial reps to offer an expanded portfolio by offering a total solution package.” The deal also opens new markets, where rubber is the preferred type, such as in stairwells and treads.

She noted in the commercial sector being able to offer a complete package of hard and soft surface products as Mannington can do is something architects and designers appreciate. “It makes their jobs easier having to deal with just one supplier.”

As a category, rubber does approximately $511 million a year (FCNews, June 30) and is primarily used in the contract segment with more than 95% of sales going to this area.

Amoroso said if the opportunity presented itself, Mannington would be “open” to expand the product into the residential market.

Green bounce

In addition to being a durable, easy maintenance product that is also soft underfoot, rubber has a green component and as more consumers are seeking environmentally friendly options, the opportunity to move into residential may come sooner than later.

She noted Burke’s eco commitment is a core philosophy shared by Mannington. “Both companies have a commitment to sustainability and environmental responsibility that can be summed up in two simple words: actions speak. In fact, Burke’s Web site contains an environmental statement that speaks to its active commitment, ‘All new flooring products introduced to the market must contain sustainable and/or recycled materials.’”

Concurrent with this initiative, Burke said it will also “work to re-engineer our existing products to meet the same environmentally sound criteria.”

As an example, Amoroso pointed to one of the company’s latest products under the Endura brand, EcoScore athletic rubber flooring, which contains 67% post-consumer recycled content. According to the company, it is “the most environmentally responsible, high-performance fitness tile on the market today.”

Family values

Burke’s Pitman said beyond all the synergies mentioned, “the similarities in our corporate cultures and experiences are a big advantage.”

Both Mannington and Burke “have histories steeped in family values,” Amoroso added. “Founded by families that believe in ‘doing the right thing,’ with a commitment to their craft, their community and their associates. The companies’ corporate cultures are similar in that the associates in each often stay to work there for their entire careers. It’s not unusual to find folks who have been there for 20, 30, 40 years.”

That is why Keith Campbell, Mannington’s chairman, called this “a great acquisition. Mannington and Burke are both dedicated to the mission of being good people to do business with. We believe that it’s our duty as good corporate citizens to do what we can to make this world a better place through our people, our products and our approach to environmental responsibility.”

Put simply, he concluded, adding Burke “just makes us stronger, especially in the commercial marketplace. Mannington is growing; growing in the number of products we are offering to people and growing in the marketplace.”