Armstrong World to spin off floorings business to focus on ceilings unit

 "Armstrong World Industries" floring
Source: Armstrong World Industries

Construction materials maker Armstrong World Industries said it would spin off its flooring business to concentrate on its ceilings unit, sending the company's shares up 4 percent before the bell.

Armstrong World's floorings business recorded sales of $1.26 billion in 2014, or about 49 percent of total revenue.

"There is little existing overlap between the businesses, and we expect the separation to create minimal incremental operating expenses," Chief Executive Matthew Espe said in a statement on Monday.

Armstrong World also reported smaller-than-expected fourth-quarter revenue, hurt by lower sales in the Americas as well as a stronger dollar.

The tax-free spin-off of the floorings unit is expected to close in the first quarter of 2016, the company said.

Armstrong World exited its European flooring business in December due to cooling housing demand on the continent, which made up nearly a fifth of Armstrong's revenue in 2013.

Evercore Partners is advising the company on the separation process.

Armstrong's shares were up at $57 in premarket trading. Up to Friday's close of $54.80, the stock had fallen nearly 8 percent in the past 52 weeks.