HNI (HNI) M&A Announcement summary

Deal rationale and strategic fit

• Combines complementary brand portfolios and dealer networks to serve a broader range of customers across diverse industry segments, including SMB, corporate, healthcare, education, and hospitality.

• Unites innovation, digital transformation, and operational excellence to accelerate advanced workplace solutions and shareholder value.

• Expands coverage across US metropolitan areas and enhances distribution network.

• Positions the combined entity to capitalize on in-office work trends and evolving workplace needs.

• Focuses on long-term profitable growth and operational excellence.

Financial terms and conditions

• Total consideration for Steelcase shareholders is approximately $2.2 billion in cash and stock, implying $18.30 per share, with $7.20 in cash and 0.2192 HNI shares per Steelcase share.

• Implied valuation multiple is 5.8x TTM Adjusted EBITDA, including $120 million in annual run-rate cost synergies.

• HNI shareholders will own 64% and Steelcase shareholders 36% of the combined company post-closing.

• $1.1 billion in committed debt financing provided by J.P. Morgan and Wells Fargo.

• Combined annual net sales projected at $5.8 billion and pro forma EBITDA of $745 million, with an adjusted EBITDA margin near 13% and net leverage of 2.1x.

Synergies and expected cost savings

• Expects $120 million in annual run-rate cost synergies, mainly from procurement, logistics, and efficiency improvements, incremental to ongoing initiatives.

• 70% of synergies from cost of goods sold, 30% from freight, delivery, and SG&A.

• Cost savings to significantly benefit profit margins and cash flow.

• Enhanced revenue opportunities from complementary brands and expanded dealer network.

• Combination projected to be highly accretive to non-GAAP EPS beginning in 2027.