MUSCATINE, Iowa & JASPER, Ind. — On March 8, 2023, HNI announced an agreement to acquire Kimball International in a cash and stock transaction currently valued at approximately $455 million.

The transaction has cleared antitrust review with the statutory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expiring on April 20, 2023. The Corporation expects the transaction to close in early June following i) satisfaction of customary closing conditions and ii) approval by the Kimball shareholders at the special shareholder meeting set for May 31, 2023.

The combination creates a market leader that is strongly positioned for post-pandemic trends with an expanded presence in secondary geographies and expertise in ancillary products. The combined company is expected to have pro forma annual revenue of approximately $3 billion and pro forma adjusted EBITDA of approximately $305 million, inclusive of an estimated $25 million in annual run-rate synergies.

The announcement was made during the company's 1st quarter 2023 financial results release. The corporation had sales for the first quarter ended April 1, 2023 of $479.1 million and net income of $1.6 million. 

Highlights of the report include:

• Profit growth actions in Workplace Furnishings delivering results – A return of annual net productivity savings, benefits from streamlining efforts and cost actions implemented in 2022, and continued improvement of price-cost provided profitability support in the first quarter. As a result, the first quarter seasonal non-GAAP operating loss in Workplace Furnishings narrowed by more than 40 percent on a year-over-year basis, despite top line pressure associated with prior-year backlog dynamics and weaker macroeconomic conditions. The first quarter marked the fourth consecutive quarter of year-over-year profit improvement in Workplace Furnishings.
• Demand in Workplace Furnishings supports long-term optimism, although near-term conditions remain dynamic – Workplace Furnishings revenue in the first quarter surpassed the Corporation’s previous outlook with shipments to small-to-medium sized businesses and to contract customers both exceeding expectations. Organic orders grew 13 percent in the first quarter compared to the prior year reflecting improving demand trends, the Corporation’s unique market position, and the benefit of pull-forward activity driven by price increases.
• Residential Building Products prepared for lower demand – Consistent with the Corporation’s previously discussed expectations, higher interest rates and economic uncertainty negatively impacted Residential Building Products segment demand in the first quarter. However, productivity savings, cost reduction actions, and continued price-cost improvement offset nearly half of the volume-related profit pressure. As a result, segment operating margin remained in the mid-teens.

“Our actions to drive profit expansion in Workplace Furnishings are delivering results, as reflected in our better-than-expected first quarter profitability. Demand trends in Workplace Furnishings are also encouraging with higher-than-anticipated order growth across our businesses. Our Residential Building Products segment performed largely as expected as we adjusted to softer housing-related demand conditions and held operating margins above 15 percent for the 11th straight quarter,” stated Jeff Lorenger, Chairman, President, and Chief Executive Officer.