Acquisitions and Divestitures

9 Months Ended

Sep. 27, 2025

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Acquisitions and Divestitures

Acquisitions and Divestitures

Pending Acquisition of Steelcase

During the third quarter of 2025, HNI entered into a definitive agreement with Steelcase Inc. (“Steelcase”) described below under which HNI will acquire Steelcase for total consideration in cash and HNI common stock currently valued at approximately $2.1 billion to Steelcase common shareholders (the "Steelcase Acquisition"). The transaction is expected to close before the end of 2025. Steelcase, a Michigan corporation, is a global design and furniture company that maintains its principal executive office in Grand Rapids, Michigan. Steelcase common stock is traded on the New York Stock Exchange (“NYSE”).

On August 3, 2025, HNI entered into an Agreement and Plan of Merger (the “Merger Agreement”) with (i) Steelcase, (ii) Geranium Merger Sub I, Inc., a Michigan corporation and a direct wholly owned subsidiary of HNI (“Merger Sub Inc.”), and (iii) Geranium Merger Sub II, LLC, a Michigan limited liability company and a direct wholly owned subsidiary of HNI (“Merger Sub LLC”).

The Merger Agreement provides, among other things, that, on the terms and subject to the conditions set forth therein (i) Merger Sub Inc. will be merged with and into Steelcase (the “First Merger”), whereupon the separate existence of Merger Sub Inc. will cease, and Steelcase will continue as the surviving corporation of the First Merger and a direct wholly owned subsidiary of HNI, and (ii) immediately after the First Merger, Steelcase will be merged with and into Merger Sub LLC (the “Second Merger,” and, together with the First Merger, the “Mergers”), whereupon the separate existence of Steelcase will cease, and Merger Sub LLC will continue as the surviving entity of the Second Merger and a direct wholly owned subsidiary of HNI.

At the effective time of the First Merger (the “First Effective Time”), each share of Class A common stock, and each share of Class B common stock, no par value, of Steelcase (the “Steelcase Class B Common Stock” and collectively with the Steelcase Class A Common Stock, the "Common Stock"), to the extent issued and outstanding immediately prior to the First Effective Time (other than shares of Steelcase Common Stock held directly by HNI, Merger Sub Inc. or Merger Sub LLC) will convert into, at the election of the holder thereof, the right to receive the consideration such holder elects, as follows (subject to adjustment as described below, the “Merger Consideration”):

•the combination (the “Mixed Consideration”) of (a) 0.2192 shares of HNI common stock, par value $1.00 per share (“HNI Common Stock”), and (b) $7.20 in cash; or

•an amount of cash (rounded to two decimal places) (the “Cash Consideration”), equal to the sum of (a) $7.20 and (b) the product obtained by multiplying 0.2192 by the volume-weighted average closing price (rounded to four decimal places) of one share of HNI Common Stock on the NYSE for the 10 consecutive trading days ending on the second full trading day preceding the First Effective Time (the “HNI Common Stock Reference Price”); or

•a number of shares of HNI Common Stock (the “Stock Consideration”) equal to the sum of (a) 0.2192 and (b) the quotient (rounded to four decimal places) obtained by dividing $7.20 by the HNI Common Stock Reference Price, in each case without interest and subject to any required tax withholding.

The Merger Consideration to be paid to holders of Steelcase Common Stock who do not make an election will be the Mixed Consideration. The Merger Consideration to be paid to holders of Steelcase Common Stock electing to receive the Cash Consideration or the Stock Consideration is subject, pursuant to the Merger Agreement, to automatic adjustment, as applicable, to ensure that the total amount of cash paid and the total number of shares of HNI Common Stock issued in the Mergers is the same as what would be paid and issued in the aggregate if all holders of Steelcase Common Stock entitled to the Merger Consideration were to receive the Mixed Consideration at the First Effective Time. No fractional shares of HNI Common Stock will be issued in the Mergers, and holders of Steelcase Common Stock will receive cash in lieu of any fractional shares of HNI Common Stock.

On the terms and subject to the conditions set forth in the Merger Agreement, at the First Effective Time, each outstanding Steelcase equity and cash-based award will be treated as follows:

•Restricted Stock Unit Awards. Each Vested Company RSU Award (as defined in the Merger Agreement) will be canceled and converted into the right to receive an amount in cash (without interest and subject to applicable withholding taxes) equal to the product obtained by multiplying (A) the number of shares of Steelcase Common Stock subject to the Company RSU Award (as defined in the Merger Agreement) immediately prior to the First Effective Time by (B) the Cash Consideration; and each Unvested Company RSU Award (as defined in the Merger Agreement) will be assumed by HNI and converted into a restricted stock unit award that settles in an amount in cash (that accrues interest) and a number of shares of HNI Common Stock (rounded to the nearest whole share) that the holder would have received if the holder would have converted all of the Steelcase Common Stock underlying the Unvested Company RSU Award based on an election to receive Mixed Consideration with the same terms and conditions as applied to such Unvested Company RSU Award immediately prior to the First Effective Time.

•Deferred Restricted Stock Units. Each Company DSU Award (as defined in the Merger Agreement) will be canceled and converted into the right to receive an amount in cash (without interest other than as required pursuant to applicable plan terms and subject to applicable withholding taxes) equal to the product obtained by multiplying (A) the number of shares of Steelcase Common Stock subject to the Company DSU Award immediately prior to the First Effective Time by (B) the Cash Consideration.

•Performance Unit Awards. Each Company PSU Award (as defined in the Merger Agreement) will be assumed by HNI and converted into a restricted stock unit award that settles in an amount in cash (that accrues interest) and a number of shares of HNI Common Stock (rounded to the nearest whole share) that the holder would have received if the holder would have converted all of the Steelcase Common Stock underlying the Company PSU Award based on an election to receive Mixed Consideration (with the performance-based vesting condition that applied to the Company PSU Award immediately prior to the First Effective Time deemed attained at the performance level based on Steelcase’s actual performance).

•Cash-Based Awards. Each Company Cash-Based Award (as defined in the Merger Agreement) will be treated in accordance with the applicable award agreement and Steelcase’s equity plan with the performance-based vesting condition that applied to the Company Cash-Based Award immediately prior to the First Effective Time deemed attained based on Steelcase’s actual performance, and accruing interest for the remainder of the performance period.

•Cash Bonus Opportunity Awards. Each Company CBOA (as defined in the Merger Agreement) will be treated in accordance with the applicable award agreement and Steelcase’s equity plan.

The Merger Agreement contains customary representations and warranties of both Steelcase, on one hand, and HNI, Merger Sub Inc. and Merger Sub LLC, on the other hand. The parties have agreed to customary covenants, including, among others,

relating to (i) the conduct of Steelcase’s and HNI’s businesses during the period between the execution of the Merger Agreement and the First Effective Time, (ii) the obligations of each of Steelcase and HNI to call a meeting of its respective shareholders and (iii) Steelcase’s and HNI’s respective non-solicitation obligations related to alternative business combination proposals.

The Merger Agreement provides for the conversion of all Steelcase Class B Common Stock into Steelcase Class A Common Stock. On August 8, 2025, in connection with the Merger Agreement, the Letter Agreement, dated, August 3, 2025 between Robert C Pew III and Steelcase and the Pew Voting Agreement, Robert C. Pew III converted 2,216,114 shares of Steelcase Class B Common Stock into 2,216,114 share of Steelcase Class A Common Stock pursuant to the voluntary conversion procedure under the Articles, resulting in an Event of Automatic Conversion (as defined in the Articles) and the automatic conversion of all shares of Steelcase Class B Common Stock into shares of Steelcase Class A Common Stock on a one-for-one basis (the "Conversion"). After the Conversion, shares of Steelcase Class B Common Stock that were converted into shares of Steelcase Class A Common Stock will be retired and canceled. As of August 8, 2025, there were 114,717,466 shares of Steelcase Class A Common Stock and no shares of Steelcase Class B Common Stock outstanding.

Under the Merger Agreement, each of the parties has agreed to use its reasonable best efforts to take such actions and do all things reasonably necessary, proper or advisable under applicable law to consummate the transactions contemplated by the Merger Agreement prior to the Termination Date (as defined below) and to cause the conditions to the Mergers under the Merger Agreement to be satisfied as promptly as reasonably practicable, including using reasonable best efforts to obtain as promptly as reasonably practicable all consents and approvals from any governmental authority or other person that are necessary, proper or advisable in connection with the consummation of the transactions contemplated by the Merger Agreement, subject to certain limitations, including with respect to divestitures and other restrictions, set forth in the Merger Agreement.

Pursuant to the Merger Agreement, at the First Effective Time, (i) the size of the board of directors of HNI will be increased by two to a total of twelve members and (ii) two members of the Steelcase board of directors will be appointed to the board of directors of HNI.

The completion of the Mergers is subject to the satisfaction or waiver of certain customary conditions, including (a) the adoption of the Merger Agreement and the approval of the First Merger by the affirmative vote of the holders of a majority of the outstanding shares of Steelcase Class A Common Stock entitled to vote thereon (the “Steelcase Shareholder Approval”); (b) approval of the issuance of HNI Common Stock (the “HNI Stock Issuance”) in connection with the Mergers by the votes cast favoring the HNI Stock Issuance exceeding the votes cast opposing the HNI Stock Issuance, in each case, by the holders of the shares of HNI Common Stock, present in person or represented by proxy and entitled to vote (the “HNI Shareholder Approval”); (c) the shares of HNI Common Stock to be issued to holders of Steelcase Common Stock in connection with the Mergers being approved for listing on the NYSE, subject to official notice of issuance; (d) the effectiveness of the registration statement to be filed by HNI with the Securities and Exchange Commission (the “SEC”) in connection with the registration under the Securities Act of 1933, as amended, of the HNI Common Stock to be issued in the Mergers; (e) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, relating to the consummation of the Mergers; (f) the absence of an injunction or law prohibiting the Mergers; (g) the accuracy of the parties’ respective representations and warranties, subject to standards of materiality set forth in the Merger Agreement, (h) material compliance by each party with its respective obligations under the Merger Agreement; and (i) the absence of a material adverse effect with respect to each of HNI and Steelcase.

The Merger Agreement includes specified termination rights, including that the Merger Agreement may be terminated (a) by the mutual written consent of each of HNI and Steelcase; (b) by either HNI or Steelcase if the consummation of the Mergers does not occur on or before May 4, 2026, subject to an automatic extension for up to three periods of three months under certain circumstances (such date, as may be so extended, the “Termination Date”); (c) by either HNI or Steelcase if there exists a law or final and nonappealable order prohibiting the Mergers; (d) by either HNI or Steelcase upon a failure to obtain the Steelcase Shareholder Approval or the HNI Shareholder Approval (in either case after a shareholder meeting is held for such purpose); (e) by either HNI or Steelcase in the event of a material uncured breach by the other party of its representations, warranties, covenants or other agreements under the Merger Agreement; (f) by Steelcase, prior to receipt of the Steelcase Shareholder Approval, to enter into a definitive agreement with respect to a Company Superior Proposal (as defined in the Merger Agreement) or by HNI, at any time prior to receipt of the HNI Shareholder Approval, to enter into a definitive agreement with respect to a Parent Superior Proposal (as defined in the Merger Agreement); and (g) by Steelcase in the event the HNI board of directors makes a Parent Adverse Recommendation Change (as defined in the Merger Agreement) or by HNI in the event the Steelcase board of directors makes a Company Adverse Recommendation Change (as defined in the Merger Agreement). The Merger Agreement provides for the payment by Steelcase to HNI of a termination fee of $67 million if the Merger Agreement

is terminated in specified circumstances, and for payment by HNI to Steelcase of a termination fee of $71 million or $134 million, as applicable, if the Merger Agreement is terminated in specified circumstances.

HNI has obtained revolving and term credit facilities in an aggregate principal amount of $925 million the proceeds of which may be used for the consummation of the Mergers, including the payment of the Cash Consideration, the repayment of existing indebtedness of HNI and Steelcase, and the payment of fees, costs and commissions in connection with the foregoing. See “Note 7. Debt.”

Other than the recognition of certain expenses related to the transactions contemplated by the Merger Agreement, there was no impact of such transactions on the Condensed Consolidated Financial Statements. In the third quarter of 2025, the Corporation incurred transaction expenses of $8.3 million and $1.4 million which were included in "Selling and administrative expenses" and "Interest expense, net", respectively, in the Condensed Consolidated Statements of Comprehensive Income. In addition, capitalized costs related to the transaction included $3.3 million of financing fees in "Other Assets," $1.4 million of financing fees in "Prepaid expenses and other current assets," and $1.0 million of stock issuance fees in "HNI Corporation's shareholders' equity," in the Condensed Consolidated Balance Sheets.

Divestiture of HNI India

In April 2025, the Corporation closed on the sale of its HNI India business, which was a component of the workplace furnishings segment, to Kokuyo Co., Ltd. in a transaction structured as a stock sale. The Corporation received $9.5 million in gross cash proceeds, or $8.1 million net of cash and transaction fees. In the year-to-date period, the Corporation recognized a $6.6 million pre-tax loss on the sale which is included in "Restructuring, impairment, and loss on divestiture" in the Condensed Consolidated Statements of Comprehensive Income. Included in the loss is a cumulative foreign currency translation loss of $6.0 million that was reclassified from accumulated other comprehensive income, and transaction-related expenses of $0.6 million.

The assets and liabilities of HNI India which were included with the sale are as follows:

	As of April 28, 2025
Assets:
Cash	$	0.8
Receivables	9.5
Inventories	2.7
Prepaid expenses and other current assets	0.8
Property, plant & equipment	4.0
Right-of-use operating leases	0.4
Total Assets	$	18.2
Liabilities:
Accounts payable and accrued expenses	$	7.4
Current maturities of debt	0.5
Lease obligations - operating	0.4
Total Liabilities	$	8.3