Kimball International, Inc. (NASDAQ: KBAL) is engaged as an omnichannel commercial furniture, fixtures and appliances. The Jasper, Indiana-based company has been in business for over 70 years and operates the following brands: Kimball, National, Etc., Interwoven, Kimball Hospitality, D’style, and Poppin. Shares of the commercial furniture company are surging 84% through early trading on Wednesday, March 8, 2023. Over the past three months, Kimball International has seen average daily volume of 127,550 shares. However, volume of 6.93 million shares or dollar volume of around $85.45 million, has already exchanged hands through early trading.
Shares of Kimball International are rallying after the company announced it has entered into a definitive agreement to be acquired by HNI Corporation (NYSE: HNI), a workplace furnishings and residential building products company. Under the terms of the deal, HNI will acquire all outstanding shares of Kimball International in a cash and stock transaction worth $485 million.
Kimball shareholders would receive $9.00 in cash and 0.1301 shares of HNI common stock for each share of Kimball International common stock owned. Kimball shareholders will own 10% of combined company post-acquisition.
The merger would create a new commercial furnishings powerhouse, combining two companies each with over 70 years of experience in the industry. As a result, the combined entity will have enhanced manufacturing capabilities, greater product offerings, expanded geographical reach, and other synergies.
On a combined basis, the new company will have a pro forma annual revenue of around $3.1 billion and pro forma adjusted EBITDA of $290 million, when taking into account annual run-rate synergies.
The transaction has already been approved by the Board of Directors of both Kimball and HNI, but remain subject to Kimball shareholder approval, regulatory approval and other customary closing conditions. Management estimates the acquisition to close sometime during mid-2023.
“We are excited about joining with Kimball International, a high-quality company we have long admired for its recognized brands, furnishings expertise built over 70 years, and established relationships across multiple sectors. The combined company will have a stronger platform for growth, delivering significant benefits for our shareholders, members, dealers, and customers. We look forward to welcoming the talented Kimball International employees to HNI,” said Jeff Lorenger, HNI’s Chairman, President, and Chief Executive Officer.
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