Shares of floor designer and manufacturer Armstrong Flooring (NYSE: AFI) are rallying premarket on Friday after the company announced it has entered into an agreement to sell its production facility, warehouse and real estate property located in South Gate, California, to an affiliate of Overton Moore Properties.
Overton Moore Properties, a leading industrial developer in California, will pay $76.7 million in cash for the property.
Armstrong Flooring will receive proceeds of approximately $65 million in cash, and $10.5 million will be held in an environmental-related escrow. The transaction is expected to close in the first quarter of 2021.
“The opportunity to monetize this facility and extract meaningful value from a land parcel in one of the nation’s strongest real estate markets is an all-around win,” said Michel Vermette, President and Chief Executive Officer of Armstrong.
“We are already seeing encouraging results from our multi-year transformation that began in 2020 and we are excited to have an even stronger capital base to pursue what we believe to be a rapidly growing market opportunity for our Company,” he added.
Armstrong Flooring’s share price is trading at $5.20 premarket, up 28.71%.
