TRG | The Bottom Line – 7/23

In the midst of the COVID-19 quarantine in 2020, TRG focused on the inevitable changes in the office space. As we headed in 2021, the office furniture manufacturer landscape changed, this time with the combination of Herman Miller and Knoll. Herman Miller on 7/19 completed its $1.8B cash/stock acquisition of Knoll. We believe the combined company is positioned well strategically to benefit from continued home products strength (both home furnishings and home offices) and rebounding corporate office spending trends. The combined company goes to market with a broad array of vibrant brands and is investing in the right channels (e.g., improved online interface/ordering, improved operations/efficiency in retail brands resulting). A consistent theme in the wake of COVID-19 has been a meaningful pick up in bold and creative M&A transactions, transactions that pivot the structure of an entire industry trajectory. The MillerKnoll transaction now begs the question how the sales channel structure may change. One bet we feel confident about is that change is a comin’.