HNI Corporation to acquire Kimball International for $485M in cash and stock

HNI Corporation (HNI) and Kimball International (KBAL) announced that they have entered into a definitive agreement under which HNI will acquire all the outstanding shares of Kimball International in a cash and stock transaction valued at approximately $485M. Under the terms of the agreement, Kimball International shareholders will receive $9.00 in cash and 0.1301 shares of HNI common stock for each share of Kimball International common stock they own. As a result of the transaction, Kimball International shareholders will own approximately 10% of the combined company. Following the close of the transaction, the combined company will continue to be led by Jeff Lorenger, HNI’s Chairman, President, and Chief Executive Officer. Juster will remain in her current role with Kimball International until the closing to ensure a seamless transition. The combined company will have pro forma annual revenue of approximately $3.1 billion and pro forma adjusted EBITDA of approximately $290 million, inclusive of annual run-rate synergies, based on each company’s respective last reported 12 months. The combination is expected to generate $25 million of annual run-rate cost synergies within three years of closing. Based on HNI’s closing share price as of March 7, 2023, the last day prior to today’s announcement, the total implied per share consideration equals $12.90, representing a premium on Kimball International’s 30-day VWAP of 81%. The consideration implies a valuation multiple of approximately 6.8x calendar year 2022 adjusted EBITDA, inclusive of synergies. The transaction has been unanimously approved by the Boards of Directors of both companies and is expected to close by mid-2023, subject to the approval of Kimball International shareholders, the receipt of required regulatory approval, and the satisfaction of other customary closing conditions.