As companies begin to ask their employees to come back to the office post-pandemic, HNI Corp. is betting on this "return-to-office" movement as it is set to invest $2.2 billion to buy the office furniture maker Steelcase.

"We believe the workplace industry is returning to growth after five years of softness," said Jeffrey Lorenger, HNI’s chairman, president, and chief executive officer. Lorenger said in an investor analyst phone call discussing the acquisition that HNI expects its residential building products business to outperform the housing and R&R markets, while maintaining its strong EBITA margins, and will continue to have elevated EPS visibility from our Mexico operation and Kimball International synergies. "These items will lead to a fourth and fifth straight year double-digit non-GAAP EPS growth in 2025 and 2026. Now, with the addition of Steelcase, we will extend our consecutive years of double-digit non-GAAP earnings growth performance to at least six years. In closing, we could not be more excited about the future as we bring together our combined capabilities to create new career growth opportunities for team members and dealer partners deliver more value for customers and further support and invest in the communities where we operate, we will now open the call to your questions. 

As "in-office work trends accelerate," Lorenger said demand for its in-office accessories and infrastructure will continue to grow.

Sara Armbruster, president and CEO of Steelcase, said that as  part of HNI, "we will continue pursuing our strategy of enhancing the work experience and helping people do their best work wherever work happens, and that's why I'm so confident that this is a win for all of our stakeholders. This transaction offers immediate and significant value at an attractive premium and as a more diversified and resilient industry leader, we'll bring together complimentary brands and reach more customers, providing even more upside from this combination."

Armbruster added that following the close of the transaction, Steelcase will continue to operate with its "current brand strategy, and through our combined capabilities with HNI, will be even better positioned to deliver for all of our stakeholders. This transaction is a testament to the incredible efforts of more than 11,000 people whose talent, dedication and passion are what makes Steelcase the industry leader that we are today."

Following the close of the transaction, the combined company will be led by Lorenger. HNI will continue to operate its corporate headquarters in Muscatine, Iowa, and Steelcase will maintain its headquarters in Grand Rapids, Michigan. HNI will maintain the Steelcase brand following the transaction’s close. 

Company leaders reiterated that the combined companies bring complementary portfolios and dealer networks that enable better service to more customers across diverse industry segments. 

HNI Corporation distributes its products through a multi-channel approach, primarily leveraging independent dealers, national office product distributors, and direct sales to end-users. They also have international distribution channels through HNI International. Steelcase products are primarily sold through a network of over 750 authorized dealers worldwide. 

Lorenger said he is confident in combining the two companies because of HNI's merger and acquisition experience, especially the 2023 purchase of Kimball International. 

"As we bring these two organizations together," he said, "our recent M&A experience and our disciplined integration approach give us confidence in our ability to successfully combine and deliver cost savings. The successful integration of Kimball International has proven that we have a playbook utilizing cross-functional teams focused on the right priorities, driving processes that deliver results. Combined, we will have an enhanced financial profile that will increase our ability to invest in operational and transformative strategies for the benefit of our customers, dealers, and members. "