HNI Corp to buy office furniture maker Steelcase for $2.2 billion; bets on return-to-office move of companies
HNI's shares fell 25% and Steelcase's rose 45% in premarket trading.
Steelcase's shareholders will get $7.20 in cash and 0.2192 shares of HNI common stock for each share they own.
This values Steelcase at about $18.30 per share, representing a premium of nearly 80% to Friday's close, according to Reuters calculations.
The Muscatine, Iowa-based HNI makes workplace furnishings and residential building products. Its acquisition of Steelcase comes at a time when "in-office work trends accelerate," HNI's CEO Jeffrey Lorenger said.
After the pandemic-era work-from-home policies, more companies have been asking their employees to return to their offices to work, buoying demand for in-office accessories and infrastructure.
The two firms' geographic footprints and dealer networks are complementary, which will allow the combined company to serve small- and medium-sized businesses and larger corporates, and the healthcare and education end markets, HNI said.
HNI expects pro forma annual revenue of the combined business at about $5.8 billion and annual run-rate synergies of $120 million.
The Grand Rapids, Michigan-based Steelcase has dealers and retailers in 790 locations across the Americas, EMEA and Asia Pacific. In 2024, it recorded annual revenue of $3.2 billion and net income of $81.1 million.
Upon the transaction's closing, expected by the end of 2025, HNI shareholders will own about 64% of the combined company and Steelcase shareholders will own the rest.
J.P. Morgan Securities is serving as exclusive financial adviser to HNI. Goldman Sachs & Co and BofA Securities are serving as financial advisers to Steelcase.
(Reporting by Aatreyee Dasgupta in Bengaluru; Editing by Sahal Muhammed)
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