Shares of Steelcase Inc. (NYSE:SCS) soared more than 50% on Monday following news that HNI Corporation (NYSE:HNI) plans to acquire the office furniture manufacturer in a transaction valued at approximately $2.2 billion, combining cash and stock.
As part of the agreement, Steelcase investors will receive $7.20 in cash and 0.2192 shares of HNI common stock for each Steelcase share they own. Based on HNI’s closing price of $50.62 last Friday, the offer equates to $18.30 per share.
The proposed acquisition values Steelcase at roughly 5.8 times its trailing twelve-month adjusted EBITDA, factoring in $120 million in expected annual cost savings. The deal is anticipated to close by the end of 2025. After completion, HNI shareholders will control approximately 64% of the merged entity, with Steelcase shareholders owning the remaining 36%.
“Joining with HNI is a bold step that marks the next era for Steelcase, our customers, dealers, and employees,” said Sara Armbruster, President and CEO of Steelcase. “Together, we will be positioned to redefine what’s possible in the world of work, workers, and workplaces.”
Once the deal is finalized, the combined company is projected to generate about $5.8 billion in annual revenue and roughly $745 million in adjusted EBITDA. Management expects the merger to be strongly accretive to non-GAAP earnings per share beginning in 2027.
HNI Chairman, President, and CEO Jeffrey Lorenger will continue to lead the unified organization. Corporate headquarters will remain in Muscatine, Iowa, while Steelcase will continue operations out of Grand Rapids, Michigan. The Steelcase brand will also be retained.
The transaction still requires regulatory approval and shareholder votes from both companies. Some Steelcase investors have already committed to supporting the agreement.
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