HNI Corporation to Acquire Steelcase for $2.2 Billion, Analysts Predict 54% Upside Potential

HNI Corporation has agreed to acquire Steelcase in a $2.2 billion deal. Analysts predict a 54% upside potential for HNI's stock price within the next year and have given the company an "Outperform" recommendation. The acquisition aims to solidify HNI's market position and diversify its product offerings.

Title: HNI Corporation Acquires Steelcase in $2.2 Billion Deal; Analysts Predict Upside Potential

HNI Corporation has agreed to acquire Steelcase in a cash-and-stock transaction valued at approximately USD 2.2 billion. The acquisition, announced earlier this week, aims to solidify HNI's market position and diversify its product offerings. Analysts predict a 54% upside potential for HNI's stock price within the next year and have given the company an "Outperform" recommendation.

The deal, which will provide Steelcase shareholders with USD 7.20 in cash and 0.2192 shares of HNI common stock for each share they own, marks a significant premium over Steelcase's prior closing price. The transaction is expected to close by the end of the year, pending customary closing conditions and regulatory approvals [1].

Following the acquisition, HNI shareholders are set to own nearly 64% of the combined entity, while Steelcase shareholders will hold the remaining 36%. The merger is anticipated to generate annual revenue of around USD 5.8 billion and achieve USD 120 million in run-rate cost synergies. HNI anticipates the deal will become accretive to earnings per share by 2027 [1].

Analysts at Benchmark reiterated their Buy rating for HNI, citing strong financial performance and the potential strategic benefits of the acquisition. Despite initial negative stock reactions, the research firm noted that the transaction "severely misconstrues the opportunities/risks associated with this transaction" [2].

The combined entity is expected to continue operating under its respective brands and retain its headquarters - HNI in Iowa and Steelcase in Grand Rapids, Michigan. The acquisition reflects shared values and customer-centric cultures between the two companies, and executives noted that the consolidation will bring strategic benefits across several verticals including healthcare, education, hospitality, and the broader corporate sector [1].

HNI and Steelcase share a deep commitment to respecting people, protecting the planet, operating with excellence, and acting with integrity. The combined company will bring together the strengths of both organizations to create new career growth opportunities for team members, deliver more value for customers, and further support and invest in the communities where they operate [3].

References:
[1] https://propnewstime.com/getdetailsStories/MjAyMjY=/hni-corporation-to-acquire-steelcase-in-usd-2-2-billion-cash-and-stock-deal
[2] https://www.investing.com/news/analyst-ratings/hni-stock-falls-as-benchmark-reiterates-buy-rating-amid-steelcase-acquisition-93CH-4170666
[3] https://www.steelcase.com/press-releases/hni-corporation-to-acquire-steelcase-inc/