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South African-based retail giant enters U.S. with $3.8 billion acquisition


A company relatively unknown outside its home base has entered the U.S. retail market in a deal to acquire Mattress Firm Holding Corp., the largest mattress retailer in the United States.

Steinhoff International Holdings will acquire Mattress Firm, whose assets include Sleepy’s, for $64.00 per share in cash, which represents a premium of 115% over the company’s closing stock price of $29.74 on Friday, August 5, 2016. The price represents a total equity value of approximately $2.4 billion and an enterprise value of approximately $3.8 billion, including net debt.

The acquisition is expected to create the largest multi-brand mattress retail distribution network in the world. Steinhoff, which is often referred to as the Ikea of Africa, is an integrated retailer that manufactures, sources and sells furniture, household goods and clothing in Europe, Africa and Australasia. It operates more than 40 brands in 30 countries.

Houston-based Mattress Firm operates more than 3,500 stores in 48 states, with sales of $3.5 billion in 2015. The Houston-based retailer will operate as a subsidiary of Steinhoff from its Houston headquarters. Steve Stagner, executive chairman and chairman of the board of Mattress Firm, and Ken Murphy, president and CEO of Mattress Firm, will remain in their positions. Stagner will join Steinhoff’s executive committee.

“Today’s announcement marks an exciting new chapter for Mattress Firm that will open up future opportunities for our employees, our customers and our business partners,” said Murphy. “We remain focused on our long-term strategy to build a national chain under one banner in the U.S. and we will continue activating and unlocking the true power of all of the assets we have assembled to truly become the preferred choice for better sleep.”

The acquisition is expected to close by or around the end of the third calendar quarter, subject to regulatory approvals.
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