By Annette Scott
Copyright farmersweekly
Reading Time: 2 minutes
Leading flooring company Mohawk looks set to acquire Bremworth in a bid expected to strengthen demand for New Zealand strong wool and support farmgate returns.
Premium wool carpet and rug manufacturer Bremworth today, October 2, announced that it has entered into a scheme implementation agreement with Floorscape Limited, a wholly owned subsidiary of Mohawk Industries, which operates the Floorscape premium hard flooring business and owns carpet manufacturer Godfrey Hirst NZ.
In the proposed scheme agreement, Floorscape Limited has agreed to acquire 100% of the shares in Bremworth with the scheme expected to deliver shareholders an estimated total consideration in the range of $1.05 to $1.15 per share, subject to market conditions and business performance.
This represents a premium of up to 135% to Bremworth’s share price prior to commencement of the strategic review announced in February 2025, and 85% on its most recent closing price of 62 cents on October 1, giving it a market capitalisation of $43.7 million prior to the announcement of the scheme.
Bremworth chair Rob Hewett said the agreement delivers a favourable outcome for shareholders while also creating long-term strategic benefits for NZ manufacturing, wool growers and regional communities.
“I am pleased to present this agreement on behalf of the board following a comprehensive strategic review and extensive engagement with potential buyers that was a process already in place.
“We [the new board] picked it up and kicked it along the way with our focus throughout about securing the best possible outcome for shareholders.
“This agreement reflects the strength of Bremworth’s brand and its future potential. It is a positive outcome for shareholders who have stood by the company through some very challenging years.”
Looking beyond shareholder returns, Hewett said the acquisition by Mohawk, a business with significant revenues, strong balance sheet and operations in more than 170 countries, represents a significant vote of confidence in NZ manufacturing.
“Importantly, this transaction also offers strategic benefits for NZ.
“With access to Mohawk’s capital and scale, Bremworth will be better able to compete in NZ and Australia with competitively priced imported carpets and provide opportunities for growth in global markets, such as North America and Europe, that have been challenging to compete in as a smaller competitor.
“In this way, a sale to Mohawk should strengthen demand for NZ strong wool, supporting farmgate returns and regional economies.”
Under the agreement, Bremworth can distribute any excess cash above an agreed minimum level to shareholders immediately prior to the scheme becoming effective at which time Bremworth expects to distribute between $21m and $28m via the capital distribution, representing a payment to shareholders between 30c and 40c per share.
The agreement remains subject to several customary conditions including shareholder approval, High Court approval, NZ Commerce Commission clearance and Australian Competition and Consumer Commission approval.
“We have our annual general meeting in a month’s time. We will engage with shareholders before that and, dependent on the regulatory approvals process time, we have a rough indication of expectation for the scheme to be all go in Calendar Q2 next year.”
Meanwhile, Hewett said Bremworth could not file its annual report on September 30 pending the scheme agreement announcement. This will now be filed on October 7.
