Steelcase Inc. in Grand Rapids has agreed to be acquired by HNI Corp. in Muscatine, Iowa in a cash and stock transaction worth approximately $2.2 billion.
Like Steelcase, HNI is a leading provider of workplace furnishings.
Under the terms of the agreement, Steelcase shareholders will receive $7.20 in cash and 0.2192 shares of HNI common stock for each share of Steelcase they own. The implied per share purchase price of $18.30 is based on HNI’s closing share price of $50.62 on Aug. 1.
Upon closing, HNI shareholders will own approximately 64 percent and Steelcase shareholders will own approximately 36 percent of the combined company.
“This acquisition brings together two respected companies with complementary strengths and represents an exciting milestone in HNI’s growth journey,” says Jeffrey Lorenger, chairman, president, and CEO of HNI. “We have long admired Steelcase for its insight-led approach, which has helped shape our industry for decades.
“With the Steelcase portfolio of brands and as in-office work trends accelerate, we will be even better positioned to meet the evolving needs of the workplace, enhance dealer and customer relationships, unlock new opportunities for growth, and create compelling value for the combined company’s shareholders.”
Sara Armbruster, president and CEO of Steelcase, says, “Joining with HNI is a bold step that marks the next era for Steelcase, our customers, dealers, and employees. Together, we will be positioned to redefine what’s possible in the world of work, workers, and workplaces. Like Steelcase, HNI is an organization that leads with purpose, shares similar values, and puts the customer at the center of everything they do. I’m excited to see this combination shape our industry.”
Among the expected benefits from the combined companies include:
- HNI’s and Steelcase’s geographic footprints and dealer networks are highly complementary, which bolsters the combined company’s ability to serve more customers across diverse industry segments, including small and medium business, large corporate, health care, education, and hospitality customers. The companies have the industry’s most respected and widely recognized brands, allowing the combined company to better support an expanded customer base and capture growth opportunities from industry tailwinds.
- Uniting a strong innovation engine with operational excellence, the combined organization will accelerate delivery of more advanced solutions to customers, while increasing value for shareholders.
- The combined company will have pro forma annual revenue of approximately $5.8 billion, pro forma Adjusted EBITDA of approximately $745 million, and 2.1x net leverage.3 These metrics are based on each company’s respective last reported 12-month results and are inclusive of annual run-rate synergies. Net leverage is expected to return to pre-acquisition levels within 18-24 months.
With recent experience in M&A execution and a disciplined integration approach, HNI’s ability to successfully combine core capabilities and deliver cost synergies will maximize the new organization’s future success. Annual run-rate synergies are expected to total $120 million when fully mature. The company projects the combination will be highly accretive to non-GAAP earnings per share beginning in 2027.
The acquisition is said to be fully aligned with HNI’s strategic framework focused on driving long-term profitable growth. With an enhanced financial profile, the new company also will be better positioned to accelerate and increase investments in long-term operational enhancements, digital transformation, and customer-centric buying experiences.
Following the close of the transaction, the combined company will continue to be led by Lorenger. HNI will continue to operate its corporate headquarters in Muscatine, Iowa, and Steelcase will maintain its headquarters in Grand Rapids. HNI will maintain the Steelcase brand following the transaction’s close. In addition, post-closing, HNI’s Board of Directors will expand from 10 directors to 12, to include two of Steelcase’s current independent board members.
The transaction, which is expected to close by the end of calendar year 2025, is subject to approval by HNI and Steelcase shareholders, the receipt of required regulatory clearances, and the satisfaction of other customary closing conditions.
