SUBSEQUENT EVENT

3 Months Ended

Mar. 31, 2021

Subsequent Events [Abstract]

SUBSEQUENT EVENT

NOTE 17. SUBSEQUENT EVENT

On April 19, 2021, Knoll, Inc. (the “Company”) and Herman Miller, Inc. (“Herman Miller”) announced the entry into an Agreement and Plan of Merger, dated April 19, 2021 (the “Merger Agreement”), by and among the Company, Herman Miller and Heat Merger Sub, Inc., a wholly owned subsidiary of Herman Miller (“Merger Sub”). The Merger Agreement provides that, among other things and subject to the terms and conditions of the Merger Agreement, Merger Sub will merge into the Company (the “Merger”), with the Company continuing as the surviving corporation and as a wholly-owned subsidiary of Herman Miller.

At the effective time of the merger, each share of Knoll, Inc. common stock outstanding immediately prior to the effective time will be automatically converted into the right to receive $11.00 in cash and 0.32 shares of Herman Miller common stock. Additionally, all unvested restricted stock, performance-based restricted stock units (“PBRSUs”) and MBRSUs will be exchanged for awards to be settled in Herman Miller common stock based on the Equity Award Exchange Ratio (as defined in the Merger Agreement). Certain of the PBRSUs and all of the MBRSUs will be modified to set the performance measurement to be achieved at 100% and to continue to vest based solely on the respective service period.

In connection with the closing of the transaction, Herman Miller will purchase all of the outstanding shares of Knoll Inc.’s preferred stock from Investindustrial VII L.P. (“Investindustrial”) for a fixed cash consideration of $253 million, representing an equivalent price of $25.06 for each underlying share of Knoll, Inc. common stock. Investindustrial has entered into a voting agreement to vote in favor of the transaction at the special meeting of Knoll shareholders to be held in connection with the transaction.

The transaction is expected to close by the end of the third quarter of 2021, subject to the approval by Knoll and Herman Miller shareholders, the receipt of required regulatory approvals and the satisfaction of closing conditions.

The Merger Agreement contains certain termination rights for the Company and Herman Miller. Upon termination of the Merger Agreement under specified circumstances, such as the Company’s acceptance of a superior proposal or the Company’s Board of Directors’ withdrawal of its recommendation regarding the planned transaction, or failure to obtain the necessary approval from the Company’s shareholders, the Company may be required to pay Herman Miller a termination fee as high as $43.0 million. Likewise, should the stockholders of Herman Miller fail to approve the transaction, or otherwise if Herman Miller is not able to complete the transaction (as described in the 8-K filed on April 22, 2021), Herman Miller would be required to pay a termination fee to the Company.