Mark Sanchez: Well, of course, this was the big blockbuster deal. We all woke up that morning a few months ago, that Monday morning, and I still say, you know, I got up that morning and checked my inbox and oh, Steelcase is being sold. And at first, I thought somebody was pulling something, but no indeed, Steelcase cut a deal with HNI Corporation, formerly known as HON, one of the other top players in the office furniture industry. A $2.2 billion deal and recently they filed the documents and sent the notices to shareholders.
There are two virtual shareholder meetings scheduled for the morning of December 5th.One is by the HNI shareholders, one's by the Steelcase shareholders. Presumably they will approve this deal and the merger. Steelcase being sold and acquired by HNI Corporation should close by the end of the year. Steelcase is this iconic corporation here in Grand Rapids. One of the companies that put Grand Rapids on the map. The deal's coming to a close here within the next month and a half or so. So, look for that vote on December 5th.
And we should also note another story we did on this just the other day is once this deal closes, you're going to see some leadership changes. The president and CEO at Steelcase, Sara Armbruster, she's going to leave. She'll depart the company after the $2.2 billion acquisition by HNI closes by the end of the year. There are also some other executives that are departing, and some will remain. This is the landscape we're now in. Again, this iconic corporation being acquired here by what was formerly a competitor and now we're going to see some changes.
And what will this ultimately mean for the Steelcase operations in Grand Rapids? Because HNI does indeed intend to operate Steelcase as a brand.What it will mean for the long run for jobs, for investment, for the presence of the Big Blue Steelcase and those logos around town remain to be seen. But we do know right now that the shareholder vote is set for December 5th and the deal will then head to close by the end of the year.
Patrick Center: When we talk about mergers, you're always looking for how each complements the product lines. And you mentioned that Steelcase will remain a brand. Can you give a bit of a snapshot of what each party brings to the table in this deal?
Mark Sanchez: It used to be that Steelcase was the higher end of the market, the Fortune 500 type clientele it had. HON, as it was previously known, was the lower cost, maybe lower in the market, smaller businesses.Now obviously over the last many years, this industry has evolved and changed. And so, there's a thinking and some of the explanation has been that their product portfolios, their product lineups are somewhat complimentary, and they both have extensive dealer networks.
So, what you'll immediately see is how do you start integrating this dealership network and which dealer carries which products and how does that go forward? You do have some lessons in this from the Herman Miller, Knoll merger a few years ago, but these companies are a little different. So, we'll see how that comes across. It's going to be this process of integrating whenever you see a big merger or acquisition. That's what the first year or more probably is all about is integrating the operations. And in this case, how you then integrate those dealer networks and make those compatible, kind of optimize, make each one make sense. Who carries what products, and they go from there.
Patrick Center: There's another iconic West Michigan corporation that's also taking the spotlight and that is Rockford-based Wolverine World Wide. Some of its boots are now part of a TV program.
Mark Sanchez: Yeah. And if you're a fan of the show Landman, it streams on the Paramount+ network. The second season will debut November 16th. If you watch this show, if you're a fan of the program, look for the boots. Keep an eye on the boots because they're a Wolverine product. Wolverine World Wide, as you say, based there in Rockford. It's venturing into what's known as product placement for the first time and it's partnering with Paramount+ series, Landman. It's a major marketing campaign. You'll see these products in the program, worn by the characters or elsewhere in the program.
And think of this in the same vein, you know, we were just talking about office furniture with steel case.Over the years, you know, you watch a program, you watch a newscast, you see the office chairs and, oh, that's an Aeron chair. That's a Mirra chair from Herman Miller, or that's a Leap chair, or that's an Embodied chair. Yes, I've covered this industry for a while. And those are forms of product placement. Or you see a TV show or watching a movie, you see that can of Diet Coke or a certain vehicle being driven and you see the logo. Those are product placements.
Corporations work directly with producers on these. And in this case, Wolverine World Wide connected with the producers of Landman and I think they provided about $20,000 in product. So come here when the program debuts on November 16th coming up here this week.You'll see some of those Wolverine branded boots in the program, Landman.
Patrick Center: We're talking with Crain's Grand Rapids Business staff writer, Mark Sanchez. There is a new club network, I guess we'll put it that way, that's taking shape across the country. We're seeing more and more of these spring up where you're seeing business executives connecting.
Mark Sanchez: Yeah, these are kind of social clubs, business clubs for executives. They're private clubs. The ones around these parts well known as the Detroit Athletic Club with Chicago Club in Chicago. And now we see coming perhaps in a year or so what's going to be known as the Commerce Club here in Grand Rapids.
This is being pushed and proposed and done by Jeff Lambert of the Public Relations and Investor Relations firm. And Jeff's been around the market for a while. A few years ago, he bought the building at 61 Commerce Avenue in downtown.
And now the story the other day here in Crain’s that was well read. He's creating the Commerce Club. This is going to be for business executives, young and old, community leaders to just as he says, get together, talk business, socialize, network, do deals, just start connecting and networking with one another.
Think of it similar to folks who you remember the old Penn Club or the old U Club here in Grand Rapids. That's similar to what he envisions. He'd really like some diversity in the membership here. It's going to be membership driven, about a $5,000 annual membership fee, although that number's not cast in stone, but that's some of what they're looking at. And then if you're a member, you will have a minimum spend each year. They're going to limit the first-year membership to about 250 people, but it's something different that's coming to town.
And Jeff, how he describes it is the three C's, connection, commerce, and community. And he wants folks who have been here a long time and then maybe up and coming business executives and community leaders. Again, just to have a place to meet, to connect, to socialize, to talk deals, to talk business, to learn and have peer-to-peer networks. It's going to be something there in the South end of downtown that he's been talking about and envisioning for a couple of years now.
And then in talking to Jeff last week for the story that we posted this week at Crain’s Grand Rapids Business, he really talked about how Grand Rapids and downtown has gone through this great period of growth and development to the point where it's now ready for this type of private club for the business leadership and business executives. Again, similar to what you have in Detroit with the Detroit AC or the Chicago Club.
Patrick Center: Everything old is new again.
Mark Sanchez: It just keeps coming around, doesn't it?
Patrick Center: Hey, before you go, any updates on mergers and acquisitions?
Mark Sanchez: Yeah, we're looking at looking at maybe a little better market here in the next year or so. We did this story. We posted it here on Tuesday at CrainsGrandRapids.com.And each year, the law firm documents and does a survey of business executives, business brokers, investment banks, folks who work in the M &A field. It comes out, they crunch the numbers and come out with an outlook.
And basically a few more people expect a better market next year. Seventy-four percent of those who responded to the survey this year by Dykema say they expect a better market in 2026 over the next year or so. That's up a number of percentage points to what they found a year ago.
And so, if you're somebody that's looking to go to market with a business, 2026 could be the good year. We see interest rates are beginning to come down. We've had a couple of two or three rate cuts here this year. There are expectations for more this month and more ahead.
So, you've seen a lot in the last couple of years, a lot of haggling over valuations when you have buyers and sellers getting together. So that will ease that a little bit. We're seeing what we're told is folks are not as high in their valuations anymore. So that's good for deal flow. And bottom line, it's going to be a little better market in 2026, presuming the economy holds up.
Patrick Center: Crain’s Grand Rapids Business staff writer, Mark Sanchez. Thank you so much.
Mark Sanchez: Thank you, Patrick.