JASPER — Kimball International announced today that the company is spinning off its electronic manufacturing services division, Kimball Electronics, resulting in two publicly traded, standalone companies.
In a news release, the company said the split will be complete in about eight to 12 months. The move is expected to make each business more nimble and enhance shareholder value.
After the spinoff is completed, James Thyen will step down as Kimball’s president and CEO, and Douglas A. Habig, who serves as board chairman, will retire.
Donald D. Charron will serve as chairman and CEO of Kimball Electronics, and Robert F. Schneider will take over as chairman and CEO of Kimball International.
In a statement, Habig said the company needed to evolve with the market, a move that required “constant reinvention of the company.”
“As such, our board determined that it is time to separate these businesses to allow for greater focus and growth,” he said. “Additionally, the board believes separating into two public companies will enable investors to value our different businesses separately, creating value and opportunities for both companies and their shareholders.”
Thyen added that the spinoff would allow each company to “better capitalize on market opportunities” and “deploy resources in a more focused way.” The split will be tax-free to shareholders.
Kimball International, one of the largest furniture companies in the U.S., is expected to have annual revenue of about $550 million after the spinoff is complete. Kimball Electronics is expected to bring in about $700 million in annual revenue.
The restructuring also will lead to a single class of stock. The company has had two classes of voting shares, Class A and Class B, since it went public in 1976.
Class A elects all but one director. Class B elects one director and has a small dividend preference. After the spinoff, shares of Class A and Class B will be equal.
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