The cash and stock transaction is valued at $485 million.
HNI Corp., a large manufacturer of contract and office furniture. has acquired Kimball is a significant player in the office furniture industry. The cash and stock transaction is valued at $485 million.
According to the terms of the agreement, each share of Kimball International common stock will be exchanged for $9 in cash and 0.1301 shares of HNI common stock. Kimball shareholders will own about 10% of the combined company as a result of the transaction.
“We are excited about joining with Kimball International, a high-quality company we have long admired for its recognized brands, furnishings expertise built over 70 years and established relationships across multiple sectors,” said Jeff Lorenger, the CEO of HNI. “The combined company will have a stronger platform for growth, delivering significant benefits for our shareholders, members, dealers and customers. The talented staff from Kimball International will soon join HNI, and we are excited to do so.”
HNI reported $568.9 million in sales in the most recent quarter, a 6% decrease from the same period last year. The fourth straight quarter of significant year-over-year growth was reported by Kimball, who reported $183 million, a 21% increase.
According to HNI, the acquisition will enable it to have a larger, more complete product offering, customized go-to-market strategies, and improved manufacturing capabilities. The combined company will be better able to profit from post-pandemic trends in the fastest-growing markets thanks to Kimball International’s strong presence in secondary geographic areas and expertise in ancillary products, it claimed.
“I’m incredibly proud of what we have built at Kimball International, and this agreement is a testament to our team’s commitment and dedication,” said Kimball CEO Kristie Juster. “As a significant next step in the history of our business, joining HNI will give our staff members more chances for professional advancement and development as a part of a bigger, more diverse industry leader who also upholds our core values.”
Jeff Lorenger will continue to serve as the company’s president after the transaction is completed. To ensure a smooth transition, Juster will continue to serve in her current position with Kimball until the closing.
The results of a significant cost-cutting initiative that HNI launched the prior quarter were evident in its most recent earnings report. Even though sales were down 6%, this led to a 47% increase in earnings per share for the quarter.
