Herman Miller Settles Nemschoff Acquisition Contingencies
ZEELAND, Mich., Jan. 31, 2011 /PRNewswire/ -- Herman Miller, Inc. (Nasdaq: MLHR), today announced that it has reached an agreement to settle the remaining contingency-based purchase price elements of its acquisition of Nemschoff Chairs, LLC ("Nemschoff"). The settlement was agreed to by the former shareholders of Nemschoff, including Mark Nemschoff, who has been a member of the Company's board of directors since the June 2009 acquisition. Under the agreement, the Company will pay additional cash consideration of $3 million in exchange for the cancellation of the remaining contingent components of the acquisition purchase price. Specifically, the agreement cancels the Company's outstanding obligations related to Contingent Value Rights ("CVR's") tied to shares of the Company's common stock currently owned by the former Nemschoff shareholders and also eliminates all remaining contingent consideration related to sales performance of the acquired business.
Concurrent with the settlement, the Company will reverse all contingency-based liabilities associated with the remaining elements of the acquisition price. These reversals, which will be reflected in the Company's fiscal third quarter, will result in pre-tax income of approximately $5.4 million. Although this income will be reflected, net of tax, in the Company's net earnings in the quarter, it will have a negligible impact on earnings per share for the period due to the required accounting treatment under GAAP.
"With the successful conclusion of the contingency agreement, and the strategic synergy and revenue already gained through the Nemschoff acquisition, our ultimate purchase price represents great value for our business and to Herman Miller shareholders," said Greg Bylsma, Chief Financial Officer.
Mark Nemschoff's board appointment was originally scheduled to expire at the Company's 2011 annual shareholders meeting. However, he has elected to resign his board position, effective January 28, 2011. Though no longer a member of the Company's board, Mr. Nemschoff will continue to provide consulting services to the Company's senior management team. Additionally, his son, Paul Nemschoff, will remain a full-time member of the Herman Miller healthcare leadership team.Mr. Nemschoff stated, "My service on Herman Miller's board of directors has offered me a seat at the table during the critical initial phases of business integration. With the combined enterprise now on firm footing and gaining momentum, I am ready to shift my attention to other areas of interest, though I look forward to continuing to serve the company as a consultant in the healthcare arena. I've enjoyed my time on the board and am confident the company has the right leadership and strategy in place to drive tremendous success in the future."
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