Acquisition of National Tile and Stone Distributor Strengthens PGS Offering in Growing Commercial Flooring Market
LOS ANGELES and MIAMI (April 1, 2022) – Platinum Equity portfolio company Paramount Global Surfaces (“PGS”) announced today the acquisition of Stone Source from a group of investors led by Founders Equity. Financial terms were not disclosed.
Headquartered in New York, Stone Source distributes natural stone, ceramic tile and other decorative surfaces to contractors and consumers via the architect and design channel for commercial and high-end residential use.
“The commercial flooring market began to rebound in 2021 and is poised to experience meaningful growth,” said PGS CEO Mike Draves. “Stone Source has a well-recognized brand, talented employees and an outstanding reputation, which will help us capitalize on these tailwinds as we continue to grow and diversify our business.”
“The combination of PGS and Stone Source accelerates our plan to create a national flooring distributor with a strong presence in both the residential and commercial markets. We will continue working closely with the management team to invest in organic and acquisitive growth that helps diversify the company by product, customer and geography.”
Stone Source’s products are used primarily in a broad range of commercial flooring applications similar to PGS’s Ceramic Technics division, which also distributes into the commercial flooring market. Stone Source also distributes products for residential applications and will complement the Happy Floors division of PGS, which serves the residential market through a network of 6,000+ independent dealers.
“Joining forces with PGS will provide Stone Source the benefit of greater scale and enable delivery of a more comprehensive product offering to our customers,” said Stone Source CEO Joe MacIsaac. “I’m proud of the way our company has performed and navigated the challenges posed by the pandemic over the past two years. This is an exciting new opportunity and I look forward to the road ahead.”
PGS is a portfolio company of Platinum Equity, which acquired the business last year.
“The combination of PGS and Stone Source accelerates our plan to create a national flooring distributor with a strong presence in both the residential and commercial markets,” added Platinum Equity Partner Jacob Kotzubei and Managing Director Nick Fries in a joint statement. “We will continue working closely with the management team to invest in organic and acquisitive growth that helps diversify the company by product, customer and geography.”
O’Melveny & Myers served as legal counsel to Platinum Equity and PGS on the transaction. SLATE Partners served as financial advisor and Carter Ledyard and Milburn LLP served as legal counsel to Stone Source on the transaction. Blackstone Credit provided the financing for the transaction.
Founded in 1987, PGS is a leading developer, importer and distributor of premium porcelain tile and luxury vinyl tile floor coverings used primarily in remodel and replacement solutions by both residential and commercial end users. Headquartered in Miami, PGS goes to market through two distinct floor covering brands: Happy Floors, which serves a diverse base of more than 6,000+ independent dealer customers throughout the United States; and Ceramic Technics, which serves approximately 1,800 architecture and design firms, and 4,000 contractors/installers and corporate customers across multiple commercial and multi-family end-user segments. For more information please visit www.happy-floors.com and www.ceramictechnics.com.
About Stone Source
Founded in 1988, Stone Source distributes natural stone, ceramic tiles and other decorative surfaces. The company’s main office and showroom are in New York and it also has locations in New Jersey, Massachusetts, Illinois, Washington, D.C., Tennessee, Texas and California. The company offers a wide variety of architecturally significant materials, along with expert knowledge and service that create design solutions for professional architects, designers and end users for residential and commercial projects. For more information please visit www.stonesource.com.
About Platinum Equity
Founded in 1995 by Tom Gores, Platinum Equity is a global investment firm with more than $25 billion of assets under management and a portfolio of approximately 50 operating companies that serve customers around the world. The firm is currently investing from Platinum Equity Capital Partners V, a $10 billion global buyout fund, and Platinum Equity Small Cap Fund, a $1.5 billion buyout fund focused on investment opportunities in the lower middle market. Platinum Equity specializes in mergers, acquisitions and operations – a trademarked strategy it calls M&A&O® – acquiring and operating companies in a broad range of business markets, including manufacturing, distribution, transportation and logistics, equipment rental, metals services, media and entertainment, technology, telecommunications and other industries. Over the past 26 years Platinum Equity has completed more than 300 acquisitions.
About Founders Equity
Founded in 1972, Founders Equity, based in New York, manages private equity investments in the real estate, manufacturing, distribution, healthcare and financial industries.