What Happened?
Shares of office furniture manufacturer Steelcase (NYSE: SCS) jumped 65.8% in the afternoon session after the company was acquired by HNI Corporation (NYSE: HNI) in a cash and stock deal valued at approximately $2.2 billion. Under the terms of the agreement, Steelcase shareholders received $7.20 in cash and 0.2192 shares of HNI common stock for each of their shares. The deal, expected to close by the end of 2025, resulted in HNI shareholders owning about 64% of the combined entity, while Steelcase shareholders retained the remaining 36%.
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What Is The Market Telling Us
Steelcase’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. Moves this big are rare for Steelcase and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock gained 13% on the news that the company reported an impressive fourth quarter 2024 results which blew past analysts' EPS expectations, while sales were in line. What stood out was a big 12% jump in new orders in the Americas region, which management attributed to broad-based demand from large corporate and government clients. Adding to the positive aspect, revenue and EPS guidance for the next quarter outperformed Wall Street's estimates. Steelcase guided for 5–9% organic revenue growth, indicating confidence in backlog conversion. Zooming out, we think this was a good quarter with some key areas of upside.
Steelcase is up 44.5% since the beginning of the year, and at $16.85 per share, has set a new 52-week high. Investors who bought $1,000 worth of Steelcase’s shares 5 years ago would now be looking at an investment worth $1,559.
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