ZEELAND, Mich. and EAST
GREENVILLE, Pa., April 19,
2021 /PRNewswire/ -- Herman Miller, Inc. (NASDAQ: MLHR)
and Knoll Inc. (NYSE: KNL) today announced that they have entered
into a definitive agreement under which Herman Miller will acquire Knoll in a cash and
stock transaction valued at $1.8
billion. The transaction, which has been unanimously
approved by the Boards of Directors of both companies, is expected
to close by the end of the third quarter of calendar year 2021,
subject to the satisfaction of closing conditions.
Under the terms of the agreement, Knoll shareholders will
receive $11.00 in cash and 0.32
shares of Herman Miller common stock
for each share of Knoll common stock they own. Based on
Herman Miller's five-day volume
weighted average price of $43.94 per
share, the transaction terms imply a purchase price of $25.06 per share, representing a 45% premium to
Knoll's closing share price on April
16, 2021. Upon completion of the transaction,
Herman Miller shareholders will own
approximately 78% of the combined company and Knoll shareholders
will own approximately 22%.
In connection with the closing of the transaction, Herman Miller will purchase all of the
outstanding shares of Knoll's preferred stock from Investindustrial
VII L.P. ("Investindustrial") for a fixed cash consideration of
$253 million, representing an
equivalent price of $25.06 for each
underlying share of Knoll common stock. Investindustrial has
entered into a voting agreement to vote in favor of the transaction
at the special meeting of Knoll shareholders to be held in
connection with the transaction.
This highly complementary combination will create the preeminent
leader in modern design, catalyzing the transformation of the home
and office sectors at a time of unprecedented disruption.
Herman Miller and Knoll collectively
have 19 leading brands, presence across over 100 countries
worldwide, a global dealer network, 64 showrooms globally, more
than 50 physical retail locations and global multi-channel
eCommerce capabilities. The combined company will have pro forma
annual revenue of approximately $3.6
billion and pro forma adjusted EBITDA of approximately
$552 million, based on each company's
respective last reported 12 months and including the anticipated
$100 million of cost synergies,
implying adjusted EBITDA margins of approximately 16%.
"This transaction brings together two pioneering icons of design
with strong businesses, attractive portfolios and long histories of
innovation," said Andi Owen,
President and Chief Executive Officer of Herman Miller. "As distributed working models
become the new normal for companies, businesses are reimagining the
office to foster collaboration, culture and focused work, while
supporting a growing remote employee base. At the same time,
consumers are making significant investments in their homes. With a
broad portfolio, global footprint and advanced digital
capabilities, we will be poised to meet our customers everywhere
they live and work. Together, we will offer a deep portfolio of
brands, technology, talent and innovation, to create meaningful
growth opportunities in all areas of the combined business."
"This combination validates the strategic direction and our
success in building a preeminent constellation of design-driven
brands and leaders, and is a testament to the achievements of the
entire Knoll team in bringing a contemporary perspective to
how we work and live," said Andrew
Cogan, Knoll Chairman and Chief Executive Officer. "We
believe this combination offers significant benefits to our
shareholders, clients, dealers and associates. Our shareholders
will receive immediate and certain value, as well as future upside
potential through ownership in an industry leader with significant
growth opportunities. Our clients, the design community and dealers
will have access to an expanded, exceptional portfolio of brands
through enhanced channels. And our associates will benefit as part
of a larger and more diversified company with a shared design
legacy."
Ms. Owen added, "In addition to driving value for Herman Miller and Knoll shareholders, dealers
and customers will benefit from a broader combined portfolio that
will deliver beauty, joy, efficiency and utility. The transaction
will also create enhanced opportunities for employees across both
organizations. Herman Miller and
Knoll both have cultures guided by values that support
problem-solving design, and doing well by doing good, and these
shared beliefs will contribute to a smooth integration."
Compelling Strategic and Financial Benefits
- Pairs two industry pioneers to catalyze the transformation
of the home and office at a time of unprecedented disruption.
As powerful trends reshape our lives – including distributed work,
a greater focus on the home, digital disruption, the rise of DTC
business models and a focus on sustainability, the health and
well-being of employees, communities and the planet – the combined
company will be well positioned to lead the industry in redefining
home and office design solutions.
- Combines two highly complementary businesses to create a
broader product portfolio. The transaction unites two
exceptional portfolios of complementary brands, each with its own
design legacy that places them at the epicenter of modern
furnishings, and more broadly, modern design.
- Enhances scale and capabilities to drive growth and
profitability. The combined company will have a scaled U.S. and
international footprint to facilitate growth of the combined
portfolio through Herman Miller's
and Knoll's well-established distribution channels. Together,
Herman Miller and Knoll will have
increased reach and the ability to better serve customers across
the contract furnishings sector, residential trade segment and
retail audience. In addition, the transaction will enhance
engagement with architects and interior designers, who support the
decision-making for both Contract and Residential customers.
- Accelerates digital and technology transformation.
Herman Miller's digital
transformation in both the Retail and Contract channels provides a
strong foundation for the combined company to scale existing
investments in both new and expanded digital capabilities. These
investments will enable the combined company to further accelerate
progress, ensuring it meets the highest level of manufacturing
excellence, customer sales and service, and user experience.
- Brings together common cultures and capabilities, with a
shared commitment to social responsibility. Herman Miller and Knoll have a long history and
shared cultures and commitment to design, innovation, operational
excellence, sustainability and social good. The transaction will
ensure that the combined company continues to deliver the highest
quality products to customers while further reinforcing
Herman Miller's and Knoll's shared
focus on building more sustainable, diverse and inclusive
enterprises.
- Delivers significant financial benefits. The transaction
is expected to generate $100 million
of run-rate cost synergies within two years of closing, driven
primarily by SG&A, supply chain, procurement and logistics
savings. Bringing together Herman
Miller and Knoll is also expected to generate significant
revenue synergies across the combined business through enhanced
scale, cross-selling, and digital and eCommerce opportunities. The
transaction is expected to be accretive to Herman Miller's adjusted cash earnings per share
in the first 12 months following the close of the transaction.
Following the close of the transaction, Ms. Owen will serve as
President and Chief Executive Officer of the combined company. Mr.
Cogan plans to depart the combined company upon closing of the
transaction after a successful 30-year career with Knoll, during
which time Knoll received the National Design Award for Corporate
and Institutional Achievement from the Smithsonian's Cooper-Hewitt,
National Design Museum.
Commenting on Mr. Cogan's leadership, Ms. Owen concluded, "I
want to thank Andrew for his partnership in reaching this agreement
and recognize his outstanding dedication to Knoll during its many
years of success. Knoll thrives today as a result of Andrew's
dedication to its founders' commitment to good design. In the
process, he has built an organization and brand portfolio dedicated
to design leadership, operational excellence, digital innovation
and customer experience, building on the storied Knoll heritage and
pioneering the development of groundbreaking products. We look
forward to welcoming Knoll's incredibly talented team."
Approvals, Financing and Timing to Close
The transaction, which is expected to close by the end of the
third quarter of calendar year 2021, is subject to approval by
Herman Miller and Knoll
shareholders, the receipt of required regulatory approvals and the
satisfaction of other customary closing conditions.
The transaction is not conditioned on financing. Herman Miller expects to fund the cash portion
of the transaction consideration with a combination of new debt and
cash on hand. Herman Miller has
obtained a commitment from Goldman Sachs for $1.751 billion of senior secured
revolving and term loan credit facilities, subject to customary
conditions.
Advisors
Goldman Sachs & Co. LLC is serving as financial advisor to
Herman Miller and Wachtell, Lipton,
Rosen & Katz is serving as legal advisor. BofA Securities is
serving as financial advisor to Knoll and Sullivan & Cromwell
is serving as legal advisor.
Conference Call, Webcast and Presentation
Herman Miller and Knoll will host
a conference call and webcast today at 8:30
a.m. ET to discuss the transaction. The webcast and
accompanying slides can be accessed on the internet in the investor
relations section of either www.hermanmiller.com or www.knoll.com.
The live call is also available by dialing (877) 524-8416 within
the U.S. and (412) 902-1028 for international callers. A replay of
the conference call will be available on both companies' investor
relations websites following the call.
Transaction Website
Additional information on the transaction and related materials
can be found on a joint transaction website at
www.NewLeaderInModernDesign.com.
About Herman Miller
Herman Miller is a globally
recognized leader in design. Since its inception in 1905, the
company's innovative, problem-solving designs and furnishings have
inspired the best in people wherever they live, work, learn, heal,
and play. In 2018, Herman Miller
created Herman Miller Group, a purposefully selected, complementary
family of brands that includes Colebrook Bosson Saunders, Design
Within Reach, Geiger, HAY, Maars Living Walls, Maharam, and
naughtone. Guided by a shared purpose—design for the good of
humankind—Herman Miller Group shapes places that matter for
customers while contributing to a more equitable and sustainable
future for all. For more information visit
www.hermanmiller.com/about-us.
About Knoll
Knoll, Inc. is a constellation of design-driven brands and
people, working together with our clients in person and digitally
to create inspired modern interiors. Our internationally recognized
portfolio includes furniture, textiles, leathers, accessories, and
architectural and acoustical elements. Our brands — Knoll Office,
KnollStudio, KnollTextiles, KnollExtra, Spinneybeck | FilzFelt,
Edelman Leather, HOLLY HUNT, DatesWeiser, Muuto, and Fully —
reflect our commitment to modern design that meets the diverse
requirements of high performance workplaces, work from home
settings and luxury residential interiors. A recipient of the
National Design Award for Corporate and Institutional Achievement
from the Smithsonian`s Cooper-Hewitt, National Design Museum,
Knoll, Inc. is aligned with the U.S. Green Building Council and the
Canadian Green Building Council and can help organizations achieve
the Leadership in Energy and Environmental Design (LEED) workplace
certification. Our products can also help clients comply with the
International Living Future Institute to achieve Living Building
Challenge Certification, and with the International WELL Building
Institute to attain WELL Building Certification. Knoll, Inc. is the
founding sponsor of the World Monuments Fund Modernism at Risk
program.
Forward-Looking Statements
This press release relates to a proposed business combination
transaction between Herman Miller,
Inc. (the "Company") and Knoll, Inc. ("Knoll"). This press release
includes forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements relate to future
events and anticipated results of operations, business strategies,
the anticipated benefits of the proposed transaction, the
anticipated impact of the proposed transaction on the combined
company's business and future financial and operating results, the
expected amount and timing of synergies from the proposed
transaction, the anticipated closing date for the proposed
transaction and other aspects of our operations or operating
results. These forward-looking statements generally can be
identified by phrases such as "will," "expects," "anticipates,"
"foresees," "forecasts," "estimates" or other words or phrases of
similar import. It is uncertain whether any of the events
anticipated by the forward-looking statements will transpire or
occur, or if any of them do, what impact they will have on the
results of operations and financial condition of the combined
companies or the price of the Company's or Knoll's stock. These
forward-looking statements involve certain risks and uncertainties,
many of which are beyond the parties' control, that could cause
actual results to differ materially from those indicated in such
forward-looking statements, including but not limited to: the
impact of public health crises, such as pandemics (including
coronavirus (COVID-19)) and epidemics, and any related company or
government policies and actions to protect the health and safety of
individuals or government policies or actions to maintain the
functioning of national or global economies and markets; the effect
of the announcement of the merger on the ability of the Company or
Knoll to retain and hire key personnel and maintain relationships
with customers, suppliers and others with whom the Company or Knoll
does business, or on the Company's or Knoll's operating results and
business generally; risks that the merger disrupts current plans
and operations and the potential difficulties in employee retention
as a result of the merger; the outcome of any legal proceedings
related to the merger; the ability of the parties to consummate the
proposed transaction on a timely basis or at all; the satisfaction
of the conditions precedent to consummation of the proposed
transaction, including the ability to secure regulatory approvals
on the terms expected, at all or in a timely manner; the ability of
the Company to successfully integrate Knoll's operations; the
ability of the Company to implement its plans, forecasts and other
expectations with respect to the Company's business after the
completion of the transaction and realize expected synergies;
business disruption following the merger; general economic
conditions; the availability and pricing of raw materials; the
financial strength of our dealers and the financial strength of our
customers; the success of newly-introduced products; the pace and
level of government procurement; and the outcome of pending
litigation or governmental audits or investigations. These risks,
as well as other risks related to the proposed transaction, will be
included in the registration statement on Form S-4 and joint proxy
statement/prospectus that will be filed with the Securities and
Exchange Commission (the "SEC") in connection with the proposed
transaction. While the risks presented here, and those to be
presented in the registration statement on Form S-4, are considered
representative, they should not be considered a complete statement
of all potential risks and uncertainties. For additional
information about other factors that could cause actual results to
differ materially from those described in the forward-looking
statements, please refer to the Company's and Knoll's respective
periodic reports and other filings with the SEC, including the risk
factors identified in the Company's and Knoll's most recent
Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K. The
forward-looking statements included in this press release are made
only as of the date hereof. Neither the Company nor Knoll
undertakes any obligation to update any forward-looking statements
to reflect subsequent events or circumstances, except as required
by law.
No Offer or Solicitation
This press release is not intended to and shall not constitute
an offer to buy or sell or the solicitation of an offer to buy or
sell any securities, or a solicitation of any vote or approval, nor
shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made, except by
means of a prospectus meeting the requirements of Section 10 of the
U.S. Securities Act of 1933, as amended.
Additional Information About the Merger and Where to Find
It
In connection with the proposed transaction, the Company intends
to file with the SEC a registration statement on Form S-4 that will
include a joint proxy statement of the Company and Knoll and that
also constitutes a prospectus of the Company. Each of the Company
and Knoll may also file other relevant documents with the SEC
regarding the proposed transaction. This document is not a
substitute for the proxy statement/prospectus or registration
statement or any other document that the Company or Knoll may file
with the SEC. The definitive joint proxy statement/prospectus (if
and when available) will be mailed to stockholders of the Company
and Knoll. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT, JOINT PROXY STATEMENT/PROSPECTUS AND ANY
OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS
ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN
THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY
CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION. Investors and security holders will be able to obtain
free copies of the registration statement and joint proxy
statement/prospectus (if and when available) and other documents
containing important information about the Company, Knoll and the
proposed transaction, once such documents are filed with the SEC
through the website maintained by the SEC at
http://www.sec.gov. Copies of the documents filed with the
SEC by the Company will be available free of charge on the
Company's website at
https://investors.hermanmiller.com/sec-filings or by
contacting the Company's Investor Relations department at
investor@hermanmiller.com. Copies of the documents filed with the
SEC by Knoll will be available free of charge on Knoll's website
at https://knoll.gcs-web.com/sec-filings or by contacting
Knoll's Investor Relations department at
Investor_Relations@knoll.com.
Participants in the Solicitation
The Company, Knoll and certain of their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction.
Information about the directors and executive officers of the
Company, including a description of their direct or indirect
interests, by security holdings or otherwise, is set forth in the
Company's proxy statement for its 2020 Annual Meeting of
Stockholders, which was filed with the SEC on September 1, 2020, and the Company's Annual
Report on Form 10-K for the fiscal year ended May 30, 2020, which was filed with the SEC on
July 28, 2020, as well as in a Form
8-K filed by the Company with the SEC on July 17, 2020. Information about the directors
and executive officers of Knoll, including a description of their
direct or indirect interests, by security holdings or otherwise, is
set forth in Knoll's proxy statement for its 2021 Annual Meeting of
Stockholders, which was filed with the SEC on April 1, 2021, and Knoll's Annual Report on Form
10-K for the fiscal year ended December 31,
2020, which was filed with the SEC on March 1, 2021. Other information regarding the
participants in the proxy solicitations and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the joint proxy statement/prospectus and other
relevant materials to be filed with the SEC regarding the proposed
transaction when such materials become available. Investors should
read the joint proxy statement/prospectus carefully when it becomes
available before making any voting or investment decisions. You may
obtain free copies of these documents from the Company or Knoll
using the sources indicated above.
Contacts
Herman Miller
Investors:
Jeff Stutz
Chief Financial Officer
616 654-8538
jeff_stutz@hermanmiller.com
Kevin Veltman
VP of Investor Relations & Treasurer
616 654-3973
kevin_veltman@hermanmiller.com
Media:
Todd Woodward
media_relations@hermanmiller.com
616 654-5977
Knoll
Investors:
Charles Rayfield
Senior Vice President and Chief Financial Officer
215 679-1703
crayfield@knoll.com
Media:
David E. Bright
Senior Vice President, Communications
212 343-4135
dbright@knoll.com
1 Includes $1.25
billion of term loan facilities and a $0.5 billion revolving credit facility expected
to be undrawn at close.
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SOURCE Herman Miller, Inc.;
Knoll, Inc.