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Knoll Soars, Herman Miller Slides on $1.8 Billion Merger

Herman Miller will acquire office-furniture rival Knoll for cash and stock valued at more than $25 a share.
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Office furniture company Herman Miller  (MLHR) - Get Herman Miller, Inc. Report said Monday it would acquire rival Knoll  (KNL) - Get Knoll, Inc. Report for cash and stock valued at $1.8 billion.

At last check shares of Knoll, East Greenville, Pa., soared 31% to $22.61 while Herman Miller, Zeeland, Mich., fell 13% to $38.47.

Under the terms, Herman Miller will pay $11 cash and 0.32 share for each Knoll share.

Based on Herman Miller’s five-day volume-weighted-average price of $43.94 a share, the transaction terms indicate a purchase price of $25.06 a share, a 45% premium to Knoll’s Friday closing share price.

Both companies' boards have approved the terms. The deal, expected to close in the third quarter, is subject to regulatory clearance and approval by holders of both companies.

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At closing, Herman Miller holders will own about 78% of the combined company and Knoll holders 22%.

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Herman Miller will purchase all Knoll’s preferred shares outstanding from Investindustrial VII LP for $25.06 each, $253 million.

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Andi Owen, president and chief executive of Herman Miller,will become president and CEO of the combined company. Andrew Cogan, Knoll's chairman and CEO, will leave the new entity after 30 years with Knoll.

Herman Miller and Knoll collectively have 19 brands, presence in across more than 100 countries worldwide, 64 showrooms globally, more than 50 physical retail locations and e-commerce capabilities.

 The combined company will have pro forma annual revenue of roughly $3.6 billion and pro forma adjusted earnings before interest, taxes depreciation and amortization of about $552 million.

Earlier this month, Herman Miller appointed top gamer and Twitch streamer Tim “TimtheTatman” Betar as company's first global brand ambassador.

Last week, furniture company Lovesac  (LOVE) - Get The Lovesac Company Report reported stronger-than-expected earnings for the latest quarter.