Jeff Hamar

By Louis Iannaco
Sante Fe Springs, Calif.— Galleher Inc., the privately held floor covering distributor headquartered here, has agreed to sell its business to Japan-based Itochu Corp. Galleher had sales in 2006 in excess of $115 million. Terms of the deal were not disclosed, but Galleher will operate as a subsidiary within the Itochu Group, a general trading company with more than $18 billion in revenues in 2006.

Tomoaki Kato, general manager, Itochu Corp., and Jeff Hamar, Galleher’s president, said the transaction represents a “significant milestone for both firms to expand their flooring distribution businesses by providing greater resources to serve their customers and maintain strong relationships with suppliers.”

For Itochu, the acquisition allows for a platform to establish U.S.-based distribution for hard surface flooring. “Itochu has vast experience in distribution, trading and logistics,” Hamar said. “It has a significant position in the forest products and building materials industry.”

Hamar noted Itochu’s largest U.S.-owned subsidiary is Primesource, a $1.4 billion building materials distributor. Company research indicated hard surface flooring products would grow at a rate faster than GNP growth for the next decade in the U.S. “Given its expertise in distribution, knowledge of U.S. building materials and confidence in floor covering distribution’s strong growth prospects, an acquisition made a great deal of sense to Itochu.”

In addition, Hamar said the company has great contacts in many countries. “We believe they can help us secure a better supply chain strategy for some of our private-label products from Asia,” he said. “An additional component is the financial strength of Itochu. Given its desire to grow our business in a substantial way over the next decade, the funds needed to pursue appropriate strategies will be available. These are among the many ways I know Itochu will add much value to Galleher.”

For Galleher, the merger opens the opportunity to expand its customer base and develop new product lines by leveraging its sales force. Over time, Hamar said, additional growth strategies will emerge that will make Galleher a more significant force in North America.

All members of Galleher’s management team will remain with the business, including Jeff Hamar, Todd Hamar, Vicki Dryden and Raymond Iodice. There are no planned changes to the business, said Jeff Hamar, who confirmed the company will operate under the premise of “business as usual.”

For more information on Galleher and the products it carries, call 562.356.4610.