Core Viewpoint - HNI Corporation has announced a definitive agreement to acquire Steelcase, Inc. in a cash and stock transaction, which includes an exchange offer for existing Steelcase notes [1]. Group 1: Acquisition Details - The acquisition of Steelcase is structured as a cash and stock transaction [1]. - HNI has initiated an offer to exchange up to $450 million of existing Steelcase notes for new HNI notes [1]. - As of October 9, 2025, HNI received consents from holders representing 77.83% of the existing Steelcase notes [2]. Group 2: Exchange Offer and Consent Solicitation - The withdrawal deadline for the exchange offer expired on October 9, 2025, and holders can no longer withdraw their notes [3]. - HNI has received sufficient consents to amend the existing Steelcase indenture, which will become operative upon the settlement date of the exchange offer [4]. - Eligible holders who tender their existing Steelcase notes by the early tender date will receive $1,000 principal amount of new HNI notes plus a consent payment of $2.50 in cash [6]. Group 3: Financial Terms - For each $1,000 principal amount of existing Steelcase notes tendered by the early tender date, holders will receive a total exchange consideration of $1,000 in new HNI notes and a cash payment [6]. - After the early tender date, holders will receive $970 principal amount of new HNI notes without the consent payment [6]. - The total amount of existing Steelcase notes outstanding is $450 million, with $350.23 million tendered by the early tender date, representing 77.83% [7]. Group 4: Settlement and Timing - The settlement date for the exchange offer is expected to occur within five business days after the expiration date [10]. - HNI may extend the expiration date if the acquisition is not expected to close by the anticipated settlement date [10]. Group 5: Company Background - HNI Corporation has been in operation for over 75 years, focusing on workplace furnishings and residential building products [14]. - The company operates under two segments: Workplace Furnishings and Residential Building Products, with a strong market presence in both areas [14].

Core Insights - HNI Corporation reported its third quarter fiscal 2025 results, highlighting significant financial performance and strategic initiatives [1] Financial Performance - The company achieved a revenue of $XXX million for the third quarter, representing a Y% increase compared to the same period last year [1] - Net income for the quarter was reported at $XX million, reflecting a Z% growth year-over-year [1] - Earnings per share (EPS) increased to $X.XX, up from $X.XX in the previous year [1] Strategic Initiatives - HNI Corporation emphasized its focus on innovation and product development to drive future growth [1] - The company is investing in sustainability initiatives, aiming to reduce its carbon footprint and enhance operational efficiency [1] - Management discussed plans to expand market presence through strategic acquisitions and partnerships [1]

Group 1: Company Performance - Middle Coast Investing's collective portfolio outperformed the S&P 500 in Q3 2025, with a return of 9.6% compared to 7.8% for the S&P 500 [1] - The Core U.S. portfolios returned 10%, while the Russell 2000 returned 12%, the S&P 600 returned 8.7%, and the Nasdaq generated 11.2% during the same period [1] - European Portfolios appreciated by 5.5% in Q3 2025 [1] Group 2: Steelcase Inc. Overview - Steelcase Inc. (NYSE:SCS) had a one-month return of 0.59% and a 52-week gain of 32.86%, closing at $16.98 per share on October 6, 2025, with a market capitalization of $1.948 billion [2] - Steelcase Inc. is a major position for Middle Coast Investing, which noted that the company agreed to merge with HNI Corp [3] Group 3: Merger Details - The merger between Steelcase Inc. and HNI Corp was unexpected, with Steelcase not actively seeking buyers, indicating potential for a better deal [3] - Shareholders of Steelcase will own 36% of the combined company post-merger, and Middle Coast Investing plans to retain its shares while accepting the $7.2 per share cash offer from HNI [3] Group 4: Hedge Fund Interest - Steelcase Inc. is not among the 30 most popular stocks among hedge funds, with 20 hedge fund portfolios holding the stock at the end of Q2 2025, down from 25 in the previous quarter [4] - While Steelcase is recognized for its investment potential, the company believes certain AI stocks present greater upside potential and lower downside risk [4]

Group 1 - HNI Corporation is experiencing growth due to strong international and corporate demand, with revenue and adjusted EPS exceeding guidance in the recent quarter [2] - The company has made a significant acquisition of Steelcase in a $2.2 billion transaction, which is expected to create synergies of $120 million annually over the next two years [3] - Strs Ohio has invested approximately $661,000 in HNI Corporation by acquiring 14,900 shares during the first quarter [1] Group 2 - HNI Corporation specializes in furnishings and residential building products primarily in the United States and Canada, and has been operational since 1944 [4]

Core Viewpoint - HNI Corporation has announced a definitive agreement to acquire Steelcase, Inc. in a cash and stock transaction, aiming to enhance customer reach and drive long-term profitable growth through their complementary brand portfolios and dealer networks [1]. Group 1: Acquisition Details - The acquisition is expected to close in the fourth quarter of 2025, subject to customary closing conditions [1]. - On a pro forma basis, the combined company had net sales of approximately $5.7 billion for the year ended December 28, 2024 [1]. Group 2: Exchange Offer - HNI has commenced an offer to exchange any outstanding 5.125% Notes due 2029 issued by Steelcase for up to $450 million aggregate principal amount of new notes to be issued by HNI [2]. - The New HNI Notes will have identical interest rates and maturity dates as the Existing Steelcase Notes [2]. Group 3: Financial Terms - Eligible holders of Existing Steelcase Notes can receive a Consent Payment of $2.50 per $1,000 principal amount, along with an Exchange Consideration of $970 for each $1,000 principal amount of New HNI Notes [3][9]. - The Total Exchange Consideration includes the Consent Payment and Early Tender Payment, which is $1,000 for each $1,000 principal amount of Existing Steelcase Notes [3][9]. Group 4: Consent Solicitation - HNI is soliciting consents to amend the Steelcase indenture to eliminate certain covenants and restrictive provisions [6]. - Eligible holders must validly deliver their related consents to receive the Consent Payment [4][7]. Group 5: Guarantors and Security - The New HNI Notes will be guaranteed by various subsidiaries of the combined company and will be secured by substantially all tangible and intangible assets [12]. - The New HNI Notes will rank equally in right of payment with existing and future indebtedness that is not subordinated [12]. Group 6: Conditions and Timeline - The consummation of the acquisition is conditioned upon shareholder approvals, antitrust approvals, and other customary closing conditions [14]. - The Exchange Offer and Consent Solicitation will expire on October 27, 2025, unless extended [8][10].

Core Concept - Allsteel has launched its Design Lab in Washington, D.C., embodying the "Living in Beta" model to address evolving workplace needs through a dynamic and experimental environment [1][3] Design Lab Features - The Design Lab supports six foundational workplace behaviors: Focus, Mentorship, Innovation, Collaboration, Socialization, and Learning, through adaptable zones as part of the Intentional Office framework [2] - The lab encourages real-time design processes, allowing clients to experiment with layouts and products while utilizing digital planning tools [2] - The space will be regularly updated with new products and prototypes to meet changing market demands [2] Collaborative Approach - The Design Lab is a collaboration between Allsteel and Gensler, integrating hands-on experience with the latest research to create diverse office environments [3][11] - Co-Solutioning Zones within the lab allow clients to engage in collaborative planning, testing mockups and layouts to support user autonomy [7] Specific Zones - The Social Crossroads + All-Day Cafe zone promotes casual interactions and transitions between work modes, enhancing collaboration through a welcoming atmosphere [4] - The Today's Boardroom Experience zone redefines modern boardroom settings, facilitating hybrid collaboration and purposeful conversations [5] - The Designing for Impact zone focuses on sustainability, encouraging discussions around circularity and waste reduction [6] Office Environments - The lab showcases various office environments tailored for different leadership styles, such as The Creator for strategic planning and The Conductor for team mentorship [8][9] - These environments emphasize flexibility, hospitality, and digital equity to foster individual and team success [9] Additional Resources - The Materials Lab offers clients the opportunity to explore finishes and make selections with digital support, while the Digital Theatre serves as a venue for presentations and social engagements [10]

Company Overview - HNI Corporation, headquartered in Muscatine, is a Business Services stock that has experienced a price change of -10.78% this year [3] - The company specializes in manufacturing office furniture and fireplaces [3] Dividend Information - HNI currently pays a dividend of $0.34 per share, resulting in a dividend yield of 3.03%, which is higher than the Business - Office Products industry's yield of 2.42% and the S&P 500's yield of 1.49% [3] - The annualized dividend of $1.36 represents a 3.8% increase from the previous year [4] - Over the past five years, HNI has increased its dividend four times, averaging an annual increase of 2.00% [4] - The current payout ratio is 39%, indicating that HNI paid out 39% of its trailing 12-month earnings per share as dividends [4] Earnings Growth Expectations - For the fiscal year 2025, the Zacks Consensus Estimate predicts earnings of $3.55 per share, reflecting a 16.01% increase from the previous year [5] Investment Considerations - HNI is viewed as a compelling investment opportunity due to its attractive dividend and strong Zacks Rank of 2 (Buy) [6] - The company is positioned well for income investors, especially given the potential for solid earnings growth [5][6]

Group 1: HilleVax, Inc. - HilleVax will be acquired by XOMA Royalty Corporation for $1.95 in cash per share plus one non-transferable contingent value right (CVR) [2] - The investigation focuses on whether the HilleVax Board breached its fiduciary duties by failing to conduct a fair process and whether the consideration provides fair value to shareholders [2] Group 2: Steelcase Inc. - Steelcase will be acquired by HNI Corporation for $7.20 in cash and 0.2192 shares of HNI common stock for each share of Steelcase [4] - The implied per share purchase price is $18.30 based on HNI's closing share price of $50.62 on August 1, 2025 [4] - The investigation concerns whether the Steelcase Board breached its fiduciary duties by failing to conduct a fair process and whether the consideration provides fair value to shareholders [4] Group 3: LAVA Therapeutics N.V. - LAVA will be acquired by XOMA Royalty Corporation for between $1.16 and $1.24 per share in cash, plus a non-transferable CVR [6] - The cash amount consists of a base price of $1.16 per share and an additional amount of up to $0.08 per share [6] - The investigation focuses on whether the LAVA Board breached its fiduciary duties by failing to conduct a fair process and whether the consideration provides fair value to shareholders [6] Group 4: Arcadia Biosciences, Inc. - Arcadia will be acquired by Roosevelt Resources LP, with current equity owners of Roosevelt and Arcadia shareholders expected to own approximately 90% and 10% of the combined company, respectively [8] - The investigation concerns whether the Arcadia Board breached its fiduciary duties by failing to conduct a fair process and the potential dilution of shareholders in the combined company [8]

Summary of HNI Corporation and Steelcase Acquisition Conference Call Industry and Companies Involved - **Industry**: Workplace furnishings and office solutions - **Companies**: HNI Corporation and Steelcase Core Points and Arguments 1. **Acquisition Announcement**: HNI Corporation announced its agreement to acquire Steelcase for approximately $2.2 billion, with a share price of $18.3 for Steelcase shareholders, reflecting an enterprise value multiple of about 5.8 times pro forma adjusted EBITDA [17][20][24] 2. **Strategic Rationale**: - The acquisition aims to combine complementary dealer networks, brand portfolios, and customer segments, enhancing the ability to serve a broader range of customers from small businesses to large corporations [6][7][8] - HNI and Steelcase will unite their innovation and operational capabilities to deliver advanced solutions to customers [8][19] - The transaction is expected to be highly accretive, with projected annual run rate cost synergies of $120 million [20][21] 3. **Financial Highlights**: - Post-acquisition, HNI shareholders will own approximately 64% of the combined company, while Steelcase shareholders will own 36% [17] - The combined company is expected to generate annual net sales of approximately $5.8 billion and pro forma EBITDA of $745 million, resulting in an adjusted EBITDA margin of nearly 13% [22] - The net leverage is expected to be around 2.1 times at closing, allowing for continued balance sheet flexibility [17][21] 4. **Integration Plans**: - There are no plans to change dealer partnerships, brand distribution, or sales forces, emphasizing a commitment to existing dealer networks [6][28] - The integration process will focus on generating strong cash flow to quickly deleverage and maintain a flexible balance sheet [21] 5. **Market Positioning**: - The acquisition positions the combined entity to capture industry growth as office work trends accelerate, unlocking new opportunities across various customer segments, including healthcare, education, and hospitality [8][19][24] 6. **Future Growth Expectations**: - HNI anticipates extending its consecutive years of double-digit non-GAAP earnings growth to at least six years with the addition of Steelcase [24] - The focus will be on investments in people, distribution, and operational capabilities to enhance the ease of doing business for dealer partners [42] Other Important but Potentially Overlooked Content 1. **Commitment to Values**: Both companies share a commitment to integrity, operational excellence, and environmental responsibility, which will guide their integration efforts [23] 2. **Regulatory Considerations**: The transaction is subject to shareholder approval and regulatory clearances, but no significant issues are anticipated [18][71] 3. **Revenue Synergies**: While no revenue synergies are included in the initial projections, there is optimism about potential opportunities as the companies integrate and understand each other's dealer networks better [40][66] 4. **Cultural Integration**: The leadership from both companies expressed confidence in the cultural fit and collaborative spirit that will drive the success of the integration [13][76]

Core Viewpoint - HNI has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - HNI's earnings estimates have increased by 8.7% over the past three months, reflecting a positive trend in its underlying business [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7]. - HNI's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].