Knoll Inc. (KNL) stock sky-rocketing in the pre-market. What’s driving it higher?

Knoll Inc. (NASDAQ: KNL) stock plunged by 0.23% at the last trading close while KNL stock price kept on gaining by 31.40% in the pre-market. Knoll, Inc. is a collection of design-driven brands and individuals who collaborate in person and online with our customers to create inspiring new interiors. Furniture, textiles, leathers, shoes, and architectural and acoustical elements are also part of Knoll’s globally recognized portfolio.

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What is happening?

Herman Miller and Knoll reported on April 18, 2021, that they had reached a definitive deal in which Herman Miller would purchase Knoll for $1.8 billion in cash and stock. The merger, which has received unconditional approval from both companies’ Boards of Directors, is scheduled to close by the end of the third quarter of the calendar year 2021, subject to closing conditions being met.

Herman Miller is a well-known artist who has worked on projects all around the world. Since its inception in 1905, Herman Miller’s innovative, problem-solving concepts and furnishings have inspired the best in people wherever they live, work, learn, heal, and play.

Insight of the agreement

Knoll owners would receive $11.00 in cash and 0.32 shares of Herman Miller common stock for each share of Knoll common stock they own, according to the terms of the arrangement. The sale conditions mean a buying price of $25.06 per share, reflecting a 45 percent premium to Knoll’s closing share price on April 16, 2021, based on Herman Miller’s five-day volume-weighted average price of $43.94 per share. Herman Miller shareholders will control approximately 78 percent of the merged business after the merger closes, while Knoll shareholders will own approximately 22 percent.

Herman Miller would buy all of the remaining shares of Knoll’s preferred stock from Investindustrial VII L.P. for a fixed cash value of $253 million, reflecting an equal amount of $25.06 per underlying share of Knoll common stock, as part of the deal. Investindustrial has agreed to vote in favor of the deal at the Knoll shareholders’ extraordinary meeting to be held in conjunction with the transaction.