Why is SCS Stock Surging in Premarket Trading Today?

Steelcase Inc. (NYSE: SCS) shares are experiencing a dramatic surge in premarket trading on Monday, August 4, 2025, jumping +$4.41 to $14.58 per share, representing a remarkable 43.43% increase from Friday’s closing price of $10.18.

This explosive move comes following the announcement of a major $2.2 billion acquisition deal that will reshape the office furniture industry. The stock’s premarket performance at 8:14:40 AM EDT signals strong investor enthusiasm for what could be a transformative transaction for both companies involved.

HNI Corporation’s Strategic $2.2 Billion Acquisition of Steelcase

HNI Corporation (NYSE: HNI) announced early Monday morning that it has entered into a definitive agreement to acquire Steelcase Inc. in a cash and stock transaction valued at approximately $2.2 billion.

Under the terms of the deal, Steelcase shareholders will receive $7.20 in cash plus 0.2192 shares of HNI common stock for each Steelcase share they own. The implied purchase price of $18.30 per share represents a significant premium to Steelcase’s recent trading levels and reflects a valuation multiple of approximately 5.8x trailing twelve-month adjusted EBITDA.

The transaction combines two respected companies with complementary strengths in the workplace furnishings sector. HNI’s Chairman, President, and CEO Jeffrey Lorenger emphasized that the acquisition brings together complementary brand portfolios, dealer networks, and industry segments that will enhance customer reach across diverse markets including small and medium business, large corporate, healthcare, education, and hospitality customers. The deal is expected to create a combined company with pro forma annual revenue of approximately $5.8 billion and pro forma adjusted EBITDA of approximately $745 million.

Following the transaction’s completion, expected by the end of 2025, HNI shareholders will own approximately 64% of the combined entity while Steelcase shareholders will control about 36%. The combined organization will continue to be led by Jeffrey Lorenger, with HNI maintaining its corporate headquarters in Muscatine, Iowa, while Steelcase will retain its headquarters in Grand Rapids, Michigan. Importantly, HNI plans to maintain the Steelcase brand following the transaction’s close, preserving the heritage and market recognition of both companies.

The strategic rationale centers on capturing significant synergies and accelerating growth opportunities. HNI projects annual run-rate synergies of $120 million when fully mature, with the combination expected to be highly accretive to non-GAAP earnings per share beginning in 2027.

The companies anticipate that their complementary geographic footprints and dealer networks will bolster their ability to serve more customers while leveraging industry tailwinds from accelerating in-office work trends.

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Steelcase’s Shares Surge in Premarket Trading

Prior to the acquisition announcement, Steelcase stock had been experiencing significant challenges, with shares declining 25.33% over the past year compared to the S&P 500’s 14.53% gain.

The stock closed Friday at $10.18, down 1.45% for the session, and had been trading within a 52-week range of $9.32 to $14.36. With a market capitalization of just $1.168 billion, the company had been trading at relatively modest valuation metrics including a trailing P/E ratio of 9.79 and a price-to-sales ratio of 0.36.

The company’s recent financial performance showed mixed results, with trailing twelve-month revenue of $3.22 billion and net income of $119.3 million, translating to diluted earnings per share of $1.04. Steelcase maintained a dividend yield of 3.93% with a quarterly dividend of $0.10 per share, demonstrating its commitment to returning capital to shareholders despite challenging market conditions. The company’s balance sheet showed total cash of $226 million against a total debt-to-equity ratio of 61.25%.

Analyst sentiment had been cautious heading into the acquisition announcement, with price targets averaging $16.25 compared to the stock’s recent trading levels around $10. The acquisition price of $18.30 per share represents a substantial premium that validates the strategic value HNI sees in Steelcase’s portfolio of furniture and architectural products.

Steelcase operates globally with approximately 11,300 full-time employees and serves customers through a network of expert dealers in approximately 790 locations worldwide.

The premarket surge to $14.58 reflects investor recognition that the acquisition price offers attractive value for Steelcase shareholders, while the strategic combination promises to create a more diversified and financially robust organization.

The deal still requires approval from both companies’ shareholders, regulatory clearances, and satisfaction of other customary closing conditions, but the market’s enthusiastic response suggests confidence in the transaction’s successful completion.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.