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Investing.com -- Steelcase Inc . (NYSE:SCS) stock soared over 50% Monday after HNI Corporation (NYSE:HNI) announced it would acquire the office furniture maker in a cash and stock transaction valued at approximately $2.2 billion.
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. This represents an implied purchase price of $18.30 per share, based on HNI’s closing price of $50.62 on Friday.
The transaction values Steelcase at approximately 5.8 times trailing twelve-month adjusted EBITDA, including expected run-rate cost synergies of $120 million. Upon closing, which is expected by the end of 2025, HNI shareholders will own approximately 64% of the combined company, while Steelcase shareholders will hold the remaining 36%.
"Joining with HNI is a bold step that marks the next era for Steelcase, our customers, dealers, and employees," said Sara Armbruster, President and CEO of Steelcase. "Together, we will be positioned to redefine what’s possible in the world of work, workers, and workplaces."
The combined entity will have pro forma annual revenue of approximately $5.8 billion and adjusted EBITDA of about $745 million. The companies expect the merger to be highly accretive to non-GAAP earnings per share beginning in 2027.
Following the close, Jeffrey Lorenger will continue as Chairman, President, and CEO of the combined company. HNI will maintain its headquarters in Muscatine, Iowa, while Steelcase will keep its base in Grand Rapids, Michigan. The Steelcase brand will be maintained after the transaction closes.
The deal requires approval from shareholders of both companies and regulatory clearances. Certain Steelcase shareholders have already agreed to vote in favor of the transaction.
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