JASPER, IN - Business furniture maker Kimball International, Inc. (NASDAQ: KBALB) will split into two businesses, with a tax-free spin-off of its electronics manufacturing division, Kimball Electronics.
The parent of National Office Furniture, Kimball Hospitality and Kimball Office will form one firm, and continue to trade under the KBALB symbol.
Kimball Electronics, Inc. will trade separately as a standalone company providing electronic manufacturing services to the automotive, medical, industrial, and public safety markets.
The spin-off, to be completed in approximately 8 - 12 months, leaves Kimball International as a $550 million hospitality and business furniture manufacturer. Kimball Electronics revenues are estimated at $700 million. Kimball got its start in electronics when it began manufacturing wooden cabinets for television sets in the 1950s. It also produced pianos and organs.
“We have seen growth and then decline in markets from wooden television cabinets, acoustic pianos, electronic organs, to domestic U.S. wood veneer and dimension lumber markets," says Douglas Habig, chairman. "Surviving these changes required a constant reinvention of the company."
Habig says factors in the board's decision to split the businesses was Kimball's success in becoming a global supplier of electronic systems, as well as the impact of off-shore manufacturing on the furniture industry.
"Separating into two public companies will enable investors to value our different businesses separately," he said.
Habig plans to retire after the spin-off, as will James Thyen, President and CEO. Donald Charronwill becomes CEO of Kimball Electronics. Robert Schneider, currently CFO, becomes chairman and CEO of Kimball International.