HNI Corporation (NYSE:HNI) agreed to acquire Kimball International, Inc. (NasdaqGS:KBAL) from BlackRock, Inc. (NYSE:BLK), The Vanguard Group, Inc., Dimensional Fund Advisors LP and others on February 10, 2023. HNI Corporation entered into a definitive agreement to acquire Kimball International, Inc. from BlackRock, Inc., The Vanguard Group, Inc., Dimensional Fund Advisors LP and others for approximately $480 million on March 7, 2023. Under the terms of the agreement, Kimball International shareholders will receive $9.00 in cash and 0.1301 shares of HNI common stock for each share of Kimball International common stock they own. The total implied per share consideration equals $12.9. Total consideration to Kimball International common shareholders of approximately $485 million, with enterprise value of approximately $531 million, including approximately $46 million in Kimball International net debt. HNI received commitments from Wells Fargo and US bank for $440 million bridge loan financing. As a result of the transaction, Kimball International shareholders will own approximately 10% and HNI shareholders will own approximately 90% stake in the combined company. If the transaction is terminated by Kimball, then Kimball will be required to pay HNI a termination fee of $15,768,265, representing approximately 3.25% of Kimball’s implied deal equity value at signing based on the merger consideration. If the transaction is terminated by HNI, then HNI will be required to pay Kimball a termination fee of $24,258,870, representing approximately 5% of Kimball’s implied deal equity value at signing based on the merger consideration. Following the close of the transaction, the combined company will continue to be led by Jeff Lorenger, HNI’s Chairman, President, and Chief Executive Officer. Kristie Juster will remain in her current role with Kimball International until the closing to ensure a seamless transition. As on March 31, 2023, HNI entered into a term loan credit agreement that provides for an unsecured, delayed draw, term loan facility in the aggregate principal amount of $280 million, which to be used for the consummation of the merger. On March 14, 2023, HNI entered into an amendment to its revolving credit facility. The amendment, among other things, makes $160 million of the revolving credit facility available for the consummation of the merger, which extinguished and replaced the 364-day senior unsecured bridge term loan facility.

The transaction is subject to the approval of Kimball International shareholders, the receipt of required regulatory approval, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”) without the imposition of a Burdensome Condition, the effectiveness of the registration statement on Form S-4 to be filed by HNI pursuant to which the shares of HNI Common Stock to be issued in connection with the Merger are registered with the Securities and Exchange Commission, the authorization for listing of the shares of HNI Common Stock to be issued in connection with the Merger on the New York Stock Exchange and the satisfaction of other customary closing conditions. The transaction has been unanimously approved by the Boards of Directors of both companies. On February 10, 2023, Kimball Board unanimously accepted the acquisition proposal from HNI. Kimball Board established a committee of independent directors (the “Transaction Committee”) to assist the Kimball Board in its review, evaluation and consideration of the proposal. The applicable waiting period under the HSR Act expired on April 20, 2023. On April 27, 2023, the registration statement was declared effective by the SEC. As of May 31, 2023, the shareholders of Kimball has approved the transaction. As of May 8, 2023, HNI expects the transaction to close in early June. The transaction is expected to close by mid-2023. The transaction is expected to close on June 1, 2023.

Rothschild & Co acted as financial advisor and James P. Dougherty, Albert Zhu, Adam Kaminsky, Kevin A. Brown, Frank J. Azzopardi, Christopher Nairn-Kim, William A. Curran, Ronan P. Harty and Nathan Kiratzis of Davis Polk & Wardwell LLP acted as legal counsel to HNI. J.P. Morgan Securities LLC acted as financial advisor and fairness opinion provider and Jason Zgliniec, Lauralyn G. Bengel, Ben Leese, Olga Bogush, Derek Barella, Chris L. Bollinger and Sara Rosenberg of ArentFox Schiff LLP acted as legal advisors to Kimball International. For financial advisory services rendered in connection with the merger, Kimball has agreed to pay J.P. Morgan an estimated fee of approximately $13 million, $3 million of which became payable to J.P. Morgan at the time J.P. Morgan delivered its opinion, and the remainder of which is contingent and payable upon the consummation of the merger.

HNI Corporation (NYSE:HNI) completed the acquisition of Kimball International, Inc. (NasdaqGS:KBAL) from BlackRock, Inc. (NYSE:BLK), The Vanguard Group, Inc., Dimensional Fund Advisors LP and others on June 1, 2023. HNI Corporation’s headquarters will remain in Muscatine, Iowa. Kimball International will continue to be based in Jasper, Indiana.