This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Herman Miller Announces Agreement To Acquire Design Within Reach

Stock quotes in this article: MLHR, DWRI

ZEELAND, Mich., July 17, 2014 /PRNewswire/ -- Herman Miller, Inc. (the "Company') (NASDAQ: MLHR), today announced that it has entered into an agreement to acquire Design Within Reach, Inc. ("DWR") (OTC: DWRI), a Stamford, Connecticut-based marketer and seller of modern furniture, lighting and accessories. DWR had revenues of approximately $218 million in 2013. The transaction is subject to regulatory approval or expiration of applicable waiting periods and is scheduled to close July 28, 2014. The Company will acquire an ownership interest in DWR equal to approximately 84% for an estimated $154 million in cash, subject to adjustment for net debt, changes in working capital, and other post-closing items. As a result of the transaction, the Company estimates it will receive future tax benefits with a present value of approximately $10 million.

DWR's Chief Executive Officer ( John Edelman) and President ( John McPhee) will together continue to lead the business within Herman Miller and report to Brian Walker, CEO, Herman Miller.  Following this transaction, these executives will convert their remaining ownership interest in DWR for an approximate 8.5% ownership stake within a newly formed Herman Miller consumer business unit.

DWR was founded in 1998 with a mission to make the best in modern design readily available to the public. Today the company is North America's largest premium retailer of authored modern design, operating 38 retail Studio locations in the U.S. and Canada, an established e-commerce presence, and a popular print catalog. DWR has a diverse and well-established customer base, including consumers, architects and interior designers and small businesses. Its comprehensive channel structure, marketing acumen, and experienced management have driven both revenue growth and brand awareness, establishing the company as the premier source for modern design. Today DWR is the largest and fastest growing retailer of Herman Miller's furniture designs.

Brian Walker, Herman Miller's Chief Executive Officer, said, "The addition of DWR is a transformational step forward in realizing our strategy for diversified growth and establishing Herman Miller as a premier lifestyle brand, helping people create inspiring places where they work, live, heal and learn. This combination expands our reach in the higher margin consumer sector and we have identified multiple points of strategic leverage that will benefit our other segments and operations, as well as DWR's own growth plans."

Walker continued, "In addition to enhancing Herman Miller's brand visibility, we gain access to DWR's growing and exclusive product portfolio and proven development capabilities. This offers further benefit to our commercial workplace market and beyond. Additionally we are acquiring a complete consumer-focused infrastructure and an experienced and committed leadership team and workforce that truly values Herman Miller's design legacy. That leadership team will skillfully advance our consumer business while DWR gains new resources to further their growth plans. In short, we believe this acquisition dramatically advances our strategic interests and benefits customers, our business partners, and shareholders."

In a shared statement John Edelman, DWR CEO, and John McPhee, President, noted, "We are thrilled to be joining the Herman Miller family. We've worked closely with the company and its leadership for many years and have great respect for their approach to business and people. We also share a passion for great design and making a difference in the world. This combination will enable us to accelerate our mission to make great, authentic modern design accessible." They continued, "We represent a portfolio of the greatest modern designs from around the world. This portfolio, supported by our passionate sales and operations teams, anchors a unique value proposition focused on helping our customers create a modern life. We are excited to continue this journey with the resources and energy of Herman Miller behind us."

Brian Walker concluded, " John Edelman and John McPhee have developed a compelling vision for DWR that is aligned with Herman Miller's mission and our strategic plan. Customers and fans of DWR have enthusiastically responded to the new flagship Studios model, now opened in nine key cities in North America. We believe the continued implementation of this vision will expand the fan base for DWR and Herman Miller while delivering profitable growth for both organizations. While there are immediate strategic benefits to be gained by both organizations, earnings accretion, excluding the impact of one-time acquisition costs and required purchasing accounting adjustments, will be modest in our fiscal year that ends in June of 2015."

Greg Bylsma, Herman Miller's Chief Financial Officer, said "Each of DWR's shareholders will be entitled to receive approximately $23 per share on a fully-diluted basis as a result of the acquisition.  Furthermore, an escrow account (borne solely by the largest DWR shareholders), will be established to satisfy any post-closing obligations resulting from the transaction. Shareholders will receive further information from the Company regarding the acquisition shortly after closing."   

As previously announced, Herman Miller will be hosting an analyst day and investor conference call and webcast on July 31, 2014. This presentation will include comments from Mr. Walker and other members of his management team on the company's strategy, including the acquisition of DWR. The presentation will also include a summary of the company's updated three-year financial goals. Details for accessing that conference call can be found at the company's Investor page at www.hermanmiller.com/investors

About Design Within Reach Design Within Reach, Inc., founded in 1998 and headquartered in Stamford, Conn., is the source for the best in authentic modern design. The company markets and sells its furniture and accessories to both residential and trade customers through its retail Studios across North America, www.dwr.com and its Connecticut-based phone sales team.

DWR's financial adviser in the transaction was Financo and its legal adviser was Ellenoff Grossman & Schole LLP.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,042.90 -28.32 -0.17%
S&P 500 1,972.29 -5.51 -0.28%
NASDAQ 4,493.39 -12.4620 -0.28%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs