Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
Jasper, Indiana-based commercial furnishings company Kimball International Inc. is set to be acquired by HNI Corp., a manufacturer of workplace furnishings and residential building products headquartered in Iowa. The cash and stock deal is valued at $485 million.
Muscatine-based HNI said Wednesday that the acquisition will enhance manufacturing capabilities and enable the combined company to better benefit from post-pandemic trends in the markets it serves.
Kimball International was founded in 1950 and manufactures furnishings for a variety of industries, including health care, education and commercial real estate under multiple brands.
The company employs more than 2,400 people across its footprint, which includes offices and showrooms in Atlanta, Boston, Chicago, Dallas, Los Angeles, Miami, New York, San Francisco, and Washington D.C. About 1,600 of those employees work in Indiana.
Kimball CEO Kristie Juster said the acquisition is a testament to the company’s team.
“Joining HNI is an important next step in our company’s history and will provide our employees with more opportunities for career growth and development as part of a larger, more diversified industry leader that also shares our deeply rooted values,” Juster said in a news release.
As part of the deal, HNI CEO Jeff Lorenger will lead the combined company. Juster will remain in her current role with Kimball until the acquisition closes.
The companies did not immediately state whether any other jobs would be affected by the acquisition. HNI employs about 7,300 people.
“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,” Lorenger said. “We look forward to welcoming the talented Kimball International employees to HNI.”
Per terms of the acquisition agreement, Kimball International shareholders will receive $9 in cash and 0.1301 shares of HNI stock for each share of Kimball stock they own. HNI said Kimball stockholders will own about 10% of the combined company.
HNI said the combined company will have annual revenue of about $3.1 billion, and the acquisition is expected to generate $25 million in annual cost synergies within three years of closing.
Lorenger said the two companies have portfolios that complement each other, which also made the acquisition attractive to HNI.
“We think there’s a lot of upside in cross selling and in revenue synergies going forward, just given the nature candidly of the portfolios,” he said. “They bring some strength to us, and we bring some strength to them. So, when you net that all together, we like the coverage model, and we like the product portfolio synergies.”
Kimball reported sales of $666 million in fiscal 2022, up 17% from the previous year, but it suffered an overall loss of $15.7 million attributed to a $34 million acquisition-related impairment charge.
The acquisition has received unanimous approval from the boards of directors for both companies and remains subject to Kimball shareholder approval, regulatory approval and other closing conditions. The deal is expected to close by mid-2023.
Kimball shares rose $5.58, or 83%, to $12.30 each Wednesday in morning trading. HNI shares fell 13.5%, to $26.
Please enable JavaScript to view this content.
It is a shame to lose this iconic Indiana company. It sounds a lot like a much bigger competitor swallowing up a smaller one. Time will tell how much the aqusition “will provide our employees with more opportunities for career growth and development as part of a larger, more diversified industry leader”. I hope so but that is not usually how it works.
Sorry to lose this iconic Indiana company. It sounds a lot like a much bigger competitor swallowing up a smaller one. Time will tell how much the aqusition “will provide our employees with more opportunities for career growth and development as part of a larger, more diversified industry leader”. I hope so but that is not usually how it works.