Herman Miller goes on acquisition spree in Europe
June 7, 2018 | 12:49 pm CDT
Photo By Nine United Denmark
ZEELAND, Mich. - Office furniture giant Herman Miller has set its eyes on European furniture makers and designers - acquiring 33 percent equity interest in the Nine United Denmark A/S for $66 million and Netherlands-based Maars Living Walls.
The transactions expand Herman Miller's portfolio of global brands and allow the company to scale its consumer business, accessing a growing customer base that prioritizes both industry-leading design and value.
Founded in Copenhagen in 2002, Nine United Denmark (HAY) is a leader in ancillary furnishings in Europe and Asia, and active in both the contract and residential furnishing markets. Over the course of the coming year, HAY's goods will be available through Herman Miller's Design Within Reach channels. Herman Miller will launch an online store, as well as open four retail locations in North America.
"HAY is one of the best articulated design brands in the furnishings space," said Herman Miller CEO Brian Walker. "HAY is a key building block toward our stated priority to scale our consumer business. The HAY assortment will significantly expand our offer to a younger, more urban demographic that we have targeted for expansion."
Herman Miller also acquired the rights to the HAY brand in North America for approximately $5 million. The company has the option to increase its ownership stake in the future. Forecast revenue for HAY's current fiscal year that ends in July 2018 is expected to total approximately $155 million.
Herman Miller will acquire 48 percent of Maars Living Walls' equity for $6 million with an option to acquire a controlling interest over time.
Headquartered in the Netherlands, Maars was founded in 1946 and has since expanded to over 45 countries. Maars creates innovative solutions for interior spaces, including offices, care and cure facilities, airports, hospitality, and universities. Customers have included Dow Jones, General Electric, Google, IBM, and Microsoft. Revenue for Maars in the most recently completed fiscal year totaled approximately $65 million.
"Maars products will be a key part of our offering that brings customers best-in-class solutions to help them create a variety of enclosed settings," said Brian Walker, President and CEO of Herman Miller. "Now, more than ever, customers are looking for environments that are flexible, modular spaces, and Maars meets that demand with innovation and design at the center. Combined with other solutions we have or will be introducing in the near future, we will have a broad and leading portfolio in this important and growing solution segment. This is another key step in our efforts to increase our share of wallet as we build a stronger dealer eco-system."
Herman Miller expects to reflect its share of Maars operating results within equity earnings from non-consolidated affiliates going forward. On a GAAP basis, this transaction is expected to be approximately $0.01 dilutive to earnings per share in fiscal 2019. On an adjusted basis, excluding the estimated impact of certain purchase accounting adjustments, the transaction is expected to be break-even to earnings per share in fiscal 2019.
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