Following a deal that changed the landscape of the commercial furniture industry, Kevin Veltman has overseen the sewing together of two mammoth legacy design companies and former competitors.
Veltman serves as senior vice president and integration lead for MillerKnoll Inc., the new banner that flies over the combined companies of Zeeland-based Herman Miller Inc. and East Greenville, Pa.-based Knoll Inc.
Top executives: Andi Owen (CEO), Jeff Stutz (CFO), Chris Baldwin (group president), Debbie Propst (president of retail); John Michael (president, the Americas)
Annual sales: $3.55 billion
Total Michigan employees: Around 3,900
Company description: After merging
Advisers on the deal: Goldman Sachs & Co. LLC (financial) and Wachtell, Lipton, Rosen & Katz (legal) to Herman Miller; Bank of America Securities (financial) and Sullivan & Cromwell (legal) to Knoll
In an industry-transforming move, Herman Miller announced in April 2021 that it would acquire its longtime competitor with visions of creating an undisputed leader in modern furniture design.
The joining of the two former competitors closed in July 2021 in a $1.8 billion cash-and-stock deal in which Knoll shareholders received $11 in cash and 0.32 shares of Herman Miller common stock for each share of Knoll common stock they owned.
Since the deal closed, MillerKnoll has positioned itself as a design powerhouse, bringing together 19 different brands with a presence in more than 100 countries, 64 showrooms and more than 50 brick and mortar retail shops.
The mega deal and its subsequent effect on West Michigan and the furniture industry as a whole earned Transformational Deal of the Year status in MiBiz’s 2022 M&A Deals & Dealmakers Awards.
Once the dust started to settle on the high-profile merger, Veltman and his teams were left to join together two large legacy companies that used everything from different enterprise resource planning (ERP) systems to dealer networks to logistic fleets.
Veltman said the company spent last summer and fall focusing on integration planning, forming teams involving members from both organizations to focus on not only each business unit, but also each function, such as change management, communication and culture.
“As for culture, we know communication is a critical part of that, and change management is a key part,” Veltman said. “We had a team focused on assessing the current cultures and thinking what the new combined MillerKnoll culture is, and how that brings the best of both organizations to the forefront.”
“What underpins all this is having a group of talented people coming together,” Veltman added. “We’ve put some great people in our teams and to see them work together and start to build this new MillerKnoll has been a really exciting part of it.”
After announcing the deal, Herman Miller executives estimated that the merger would achieve roughly $100 million in cost savings by the end of two years, indicating that the most crucial phases of integration would be completed in the first couple of years. However, Veltman expects — with an integration this daunting —to encounter small system-change issues that could take years to resolve.
Since moving ahead with the integration, company executives have upped that cost savings forecast to $120 million by the end of year three. Veltman said those savings stem from a variety of areas of the business.
“Procurement, manufacturing and logistics are big areas of focus. As we have great scale, there are opportunities that come with that,” Veltman said. “I would describe those as the main areas.”
Combining dealer networks is another high priority on the integration to-do list, which includes equipping every dealer in the combined network with the full portfolio of MillerKnoll products and resources.
Bringing together those networks has been guided by feedback from dealers, customers and other professionals who serve customers, such as architects and designers.
This flurry of integration work is all going on against the backdrop of an industry that is plagued by issues stemming from the COVID-19 pandemic, such as serious supply chain bottlenecks and a shortage of workers.
For that reason, Veltman said integration has become a bit of a tightrope act.
“We just have to prioritize the resources knowing that we also have to run our day to day business at the same time as we’re integrating these two organizations,” he said. “We’ve been very focused on finding the right balance there.”