Furniture maker HNI (NYSE: HNI) is paying up to acquire Kimball International (NASDAQ: KBAL), and that has shareholders on edge. Shares of Kimball are up more than 80%, and HNI shares are down as much as 17%, as Wall Street digests the particulars of this transaction.

It has been a tough year for goods makers, and furniture manufacturers HNI and Kimball are no exceptions. Investors have been worried inflation will slow the economy and eat into the purchase of big-ticket items, leading shares of both companies to fall by more than 10% over the past year.

HNI sees the drop as an opportunity. On Tuesday, the company announced plans to buy Kimball for $485 million in cash and stock. Terms of the deal call for Kimball owners to receive $9 in cash and 0.1301 shares of HNI for each Kimball share owned, or about $12.50 per share at current prices.

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Source Fool.com