ZEELAND, Mich. and EAST GREENVILLE, Pa., - Herman Miller Inc. has entered into a definitive agreement to acquire Knoll Inc. in a cash and stock transaction valued at $1.8 billion.
Announced April 19, the transaction is expected to close by the end of the third quarter of calendar year 2021, subject to customary approval of closing conditions. Upon completion of the transaction, Herman Miller shareholders will own approximately 78% of the combined company and Knoll shareholders will own approximately 22%.
The acquisition combines two of the top 5 contract furniture makers in North America. According to a statement from Herman Miller and Knoll, the combined company will have pro forma annual revenue of approximately $3.6 billion and pro forma adjusted EBITDA of approximately $552 million, based on each company’s respective last reported 12 months and including the anticipated $100 million of cost synergies, implying adjusted EBITDA margins of approximately 16%. Herman Miller is ranked #4 overall in the FDMC 300 list of largest North American wood products producers, and second in the segment. Knoll currently ranks 14 overall and #5 in the market.
The companies cited the pandemic and new work models as factors in the decision. "This highly complementary combination will create the preeminent leader in modern design, catalyzing the transformation of the home and office sectors at a time of unprecedented disruption," the companies said in a joint statement.
“This transaction brings together two pioneering icons of design with strong businesses, attractive portfolios and long histories of innovation,” said Andi Owen, president and CEO of Herman Miller. “As distributed working models become the new normal for companies, businesses are reimagining the office to foster collaboration, culture and focused work, while supporting a growing remote employee base. At the same time, consumers are making significant investments in their homes. With a broad portfolio, global footprint and advanced digital capabilities, we will be poised to meet our customers everywhere they live and work. Together, we will offer a deep portfolio of brands, technology, talent and innovation, to create meaningful growth opportunities in all areas of the combined business.”
The two companies collectively represent 19 brands and have a presence across more than 100 countries, a global dealer network, 64 showrooms globally, more than 50 physical retail locations, and global multi-channel e-commerce capabilities.
“This combination validates the strategic direction and our success in building a preeminent constellation of design-driven brands and leaders, and is a testament to the achievements of the entire Knoll team in bringing a contemporary perspective to how we work and live,” said Andrew Cogan, Knoll chairman and CEO “We believe this combination offers significant benefits to our shareholders, clients, dealers and associates. Our shareholders will receive immediate and certain value, as well as future upside potential through ownership in an industry leader with significant growth opportunities. Our clients, the design community and dealers will have access to an expanded, exceptional portfolio of brands through enhanced channels. And our associates will benefit as part of a larger and more diversified company with a shared design legacy.”
Following the transaction, Owen will serve as president and CEO of the combined company. After a 30-year career at Knoll, Cogan plans to depart the company.
Owen added, “I want to thank Andrew for his partnership in reaching this agreement and recognize his outstanding dedication to Knoll during its many years of success. Knoll thrives today as a result of Andrew’s dedication to its founders’ commitment to good design. In the process, he has built an organization and brand portfolio dedicated to design leadership, operational excellence, digital innovation and customer experience, building on the storied Knoll heritage and pioneering the development of groundbreaking products. We look forward to welcoming Knoll’s incredibly talented team.”
Founded in 1905, Herman Miller (NASDAQ: MLHR) is headquartered in Zeeland, Michigan. In 2018, it created Herman Miller Group, a complementary family of brands that includes Colebrook Bosson Saunders, Design Within Reach, Geiger, HAY, Maars Living Walls, Maharam, and naughtone.
Headquartered in East Greenville, Pennsylvania, Knoll's (NYSE: KNL) portfolio includes furniture, textiles, leathers, accessories, and architectural and acoustical elements, under the brands: Knoll Office, KnollStudio, KnollTextiles, KnollExtra, Spinneybeck | FilzFelt, Edelman Leather, Holly Hunt, DatesWeiser, Muuto, and Fully. Knoll, Inc. is also the founding sponsor of the World Monuments Fund Modernism at Risk program.
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