Herman Miller snaps up Design Within Reach
Herman Miller has scooped up North America’s largest premium retailer of authored, modern design by entering into an agreement to acquire an 84 per cent ownership interest in Design Within Reach, Inc. (DWR), a Stamford, Connecticut-based marketer and seller of modern furniture, lighting and accessories. Today DWR is the largest and fastest growing retailer of Herman Miller’s furniture designs, and DWR had revenues of approximately US$218 million in 2013.The deal was for an estimated $154 million in cash.
DWR’s Chief Executive Officer, John Edelman, and president, John McPhee, will together continue to lead the business within Herman Miller and report to Brian Walker, CEO, Herman Miller, who said, “The addition of DWR is a transformational step forward in realizing our strategy for diversified growth and establishing Herman Miller as a premier lifestyle brand, helping people create inspiring places where they work, live, heal and learn. This combination expands our reach in the higher margin consumer sector and we have identified multiple points of strategic leverage that will benefit our other segments and operations, as well as DWR’s own growth plans.”
Walker continued, “In addition to enhancing Herman Miller’s brand visibility, we gain access to DWR’s growing and exclusive product portfolio and proven development capabilities. This offers further benefit to our commercial workplace market and beyond. Additionally we are acquiring a complete consumer-focused infrastructure and an experienced and committed leadership team and workforce that truly values Herman Miller’s design legacy. That leadership team will skillfully advance our consumer business while DWR gains new resources to further their growth plans. In short, we believe this acquisition dramatically advances our strategic interests and benefits customers, our business partners, and shareholders.”
In a shared statement John Edelman, DWR CEO, and John McPhee, President, noted, “We are thrilled to be joining the Herman Miller family. We’ve worked closely with the company and its leadership for many years and have great respect for their approach to business and people. We also share a passion for great design and making a difference in the world. This combination will enable us to accelerate our mission to make great, authentic modern design accessible.” They continued, “We represent a portfolio of the greatest modern designs from around the world. This portfolio, supported by our passionate sales and operations teams, anchors a unique value proposition focused on helping our customers create a modern life. We are excited to continue this journey with the resources and energy of Herman Miller behind us.”
Brian Walker concluded, “John Edelman and John McPhee have developed a compelling vision for DWR that is aligned with Herman Miller’s mission and our strategic plan. Customers and fans of DWR have enthusiastically responded to the new flagship Studios model, now opened in nine key cities in North America. We believe the continued implementation of this vision will expand the fan base for DWR and Herman Miller while delivering profitable growth for both organizations. While there are immediate strategic benefits to be gained by both organizations, earnings accretion, excluding the impact of one-time acquisition costs and required purchasing accounting adjustments, will be modest in our fiscal year that ends in June of 2015.”
Greg Bylsma, Herman Miller’s Chief Financial Officer, said “Each of DWR’s shareholders will be entitled to receive approximately $23 per share on a fully-diluted basis as a result of the acquisition. Furthermore, an escrow account (borne solely by the largest DWR shareholders), will be established to satisfy any post-closing obligations resulting from the transaction. Shareholders will receive further information from the Company regarding the acquisition shortly after closing.”