Herman Miller has confirmed that it is in talks to take a further 34% stake in Denmark-based office furniture company Hay, but has admitted that a press release that went out yesterday confirming this transaction was premature.
Herman Miller acquired 33% of Hay in June 2018 for $66 millionwith an option to buy an additional 34%. While the US firm confirmed that is working to execute an agreement for this increased stake and that it expects to make an announcement shortly, it said that no such transaction had yet been signed.
This is contrary to a 7 October press release issued by Herman Miller which stated it had agreed to acquire the additional 34% in Hay for around $78 million and that the acquisition would close on 2 December. The press release revealed that Hay’s sales for the fiscal year ended in July 2019 were approximately $160 million. It also said that Herman Miller would consolidate the Danish company’s operating results going forward, recording a non-controlling interest for the remaining 33% ownership stake of co-founders Rolf and Mette Hay.
Founded in Copenhagen in 2002, Hay employs around 190 people and sells into more than 50 countries. 88% of its sales come from Europe, 9% from North America and 3% from other markets. Revenue from the wholesale channel represents 52% of its mix and contract is 42%. Just 3% of sales come from the retail channel.
Herman Miller said the increased equity stake aligned with its strategic priority to accelerate profitable growth and that the further integration of Hay into the Herman Miller ecosystem would boost the development of the Danish brand globally. Since the launch of Hay North America in 2018 within its contract channel, the US company said it had seen meaningful progress, including the launch of an e-commerce platform, starting localised production and the opening of three physical locations in the Portland (OR), Costa Mesa (CA) and Chicago (IL) markets.