ZEELAND — Office furniture manufacturer Herman Miller Inc. plans to increase its ownership stake in Denmark-based Hay A/S by an additional 34 percent.
The $78 million acquisition is expected to close on Dec. 2, 2019, subject to closing conditions, according to a statement. Founders Rolf Hay and Mette Hay will retain a 33-percent stake in the Copenhagen-based company, which designs and makes contemporary furniture and accessories.
For Zeeland-based Herman Miller (Nasdaq: MLHR), the transaction follows a $66 million deal in 2018 in which the company acquired a 33-percent stake in Hay. In the previous deal, which included provisions for Herman Miller to increase its ownership stake in the future, the company also acquired the rights to the Hay brand in North America.
Since then, Herman Miller launched local production of Hay furniture from its facilities and opened three physical showrooms for the brand in Portland, Ore., Costa Mesa, Calif., and Chicago, Ill.
In a statement, the company said the deal fits with its goals to “accelerate profitable growth” and noted that further integration of Hay into Herman Miller will “accelerate the development of the Hay brand globally.”
“Scaling Hay is a key component in expanding our footprint within the retail and contract markets while reaching a younger, more urban demographic that we’ve been targeting for expansion,” stated Herman Miller President and CEO Andi Owen.
Hay generated approximately $160 million in revenue in its most recent fiscal year, which ended in July.
Herman Miller expects the acquisition to be accretive to earnings in the second half of its 2020 fiscal year. At the close of the deal, Herman Miller will control a 67-percent stake in the company.