Knoll Sells Equity, Gets $164 Million Cash in "Uncertain Macroeconomic Environment"

Knoll, Inc. today announced that an independently managed subsidiary of Investindustrial VII L.P. has agreed to purchase $164.0 million in newly issued convertible preferred stock of Knoll.

“We are pleased to have Investindustrial VII as a shareholder, fortifying our balance sheet and enhancing our ability to continue to execute our strategic plan in the face of an uncertain macroeconomic environment,” commented Andrew Cogan, Knoll Chairman and CEO. “I have had the pleasure of getting to know Investindustrial over the years and believe that they are the right investor for our company. I am confident that all of our stakeholders will benefit from their long-term investment in Knoll as well as their commitment to the design space globally.”

Andrea C. Bonomi, Chairman of the Investindustrial Industrial Advisory Board, noted, “We are excited to invest in Knoll and its strong management team as they continue to develop their constellation of design-driven brands. We believe Knoll has the opportunity to capitalize on the increasing importance of design in the way we live and work, and continue to create value over the long-term.”

Transaction terms follow:

  • $164.0 million of convertible, perpetual preferred stock, which will be convertible into shares of Knoll, Inc. 
    common stock at an initial conversion price of $16.75 per share, a 45% premium to Knoll’s thirty-trading day volume-weighted average price.

  • The preferred stock carries a 4.50% dividend, which will be payable at Knoll’s option in cash or in-kind for the first 2 years and payable in cash thereafter.

Knoll expects to use the net proceeds from the transaction for general corporate purposes, including to reduce outstanding borrowings under its credit facility. In addition, Knoll expects to appoint a director nominated by Investindustrial to its board at the closing of this transaction.

The transaction is subject to customary closing conditions, including anti-trust review.

Additional information regarding the transaction is included in a Form 8-K that will be filed by Knoll with the Securities and Exchange Commission.

The investment in Knoll is the first investment being made by an independently managed subsidiary of the $4.2 billion Investindustrial VII, and specifically within Strategic Capital Investments, a sub-strategy dedicated to investing in publicly listed companies. Investindustrial has a long-standing interest and experience in the world of architecture and design. It has in the past successfully invested in Permasteelisa, a leader in architectural envelopes (e.g. Walt Disney Concert Hall, Time Warner Center, Hearst Tower) and Neolith in the high-end surface materials for buildings, Castaldi, Flos and Louis Poulsen in lighting, and B&B Italia in designer home furniture (now part of Design Holding), and Jacuzzi Brands in hot tubs and spas.

BofA Securities acted as Knoll’s financial advisor and Sullivan & Cromwell LLP acted as legal advisor. J.P. Morgan acted as Investindustrial’s financial advisor and Wachtell, Lipton, Rosen & Katz acted as legal advisor.