Zeeland, Mich.-based Herman Miller (NASDAQ: MLHR ) is buying New York's Maharam Fabric Corporation in an all-cash deal valued at $156 million.
Herman Miller, a maker of office furniture, announced the purchase of the textile manufacturer Wednesday, and said the deal is expected to close April 29. Herman Miller CEO Brian Walker called the purchase "a natural and complementary union" and one that combines the firms' respective "operational strengths and resources [to] provide immediate, mutual strategic leverage."
Herman Miller is paying a significant premium to acquire Maharam. The purchase price of $156 million is nearly 1.5 times the value of Maharam's annual sales. By way of comparison, Herman Miller's own share price reflects only a 0.8 price-to-sales ratio. Nonetheless, Herman Miller assured investors that it expects the deal to be immediately accretive to earnings.
Whether they agree remains to be seen. Herman Miller shares closed up 0.8% at $24.77 after Wednesday trading, but the acquisition was announced only after close of trading.