Tempur Sealy to acquire Mattress Firm in $4 billion deal
A leading bedding maker is set to acquire the nation’s largest mattress specialty retailer.
Tempur Sealy International has entered into an agreement to acquire Mattress Firm in a cash and stock deal valued at approximately $4.0 billion. The acquisition will give Tempur Sealy direct ownership of its largest retail partner.
Founded in 1986, Mattress Firm operates more than 2,300 store locations in addition to an e-commerce site. The company is expected to operate as a separate business unit within Tempur Sealy following the close of the deal.
Tempur Sealy’s brands include Tempur-Pedic, Sealy and Stearns & Foster, along with non-branded offerings consisting of private label and OEM products. The company’s products are sold through its 700-plus stores and e-commerce channels as well as third-party retailers.
Together, Tempur Sealy and Mattress Firm's combined global footprint will include approximately 3,000 retail stores, 30 e-commerce platforms, 71 manufacturing facilities, and 4 state-of-the-art R&D facilities worldwide.
"This transaction advances all four of our key long-term initiatives: to develop the highest quality bedding products, promote brands with compelling marketing, optimize our diverse omnichannel distribution platform, and drive EPS growth,” said Tempur Sealy chairman and CEO Scott Thompson. “We are excited by the long-term growth prospects for our global vertically integrated company. This combination will accelerate our growth trajectory and enhance operating cash flow.”
Tempur Sealy expects to expand its existing board of directors by appointing two mutually agreed Mattress Firm directors to the Tempur board following the completion of the transaction, which is expected to occur in the second half of 2024. Both boards have approved the deal.
“As part of Tempur Sealy, our customers will benefit from our combined portfolio of highly recognized brands and products, extensive omnichannel capabilities, industry-leading innovation and best-in-class teams,” said Mattress Firm CEO John Eck.
Tempur Sealy said it has received a request for additional information and documentary material from the Federal Trade Commission. The company expects to work with the FTC to complete the acquisition.
Following the transaction, Mattress Firm's and Tempur Sealy's shareholders will own approximately 16.6% and 83.4% of the combined company.
J.P. Morgan Securities LLC is serving as sole financial advisor and Cleary Gottlieb Steen & Hamilton LLP is serving as legal counsel to Tempur Sealy.
Goldman Sachs & Co. LLC, Barclays, and Jefferies LLC are serving as financial advisors and Simpson Thacher & Bartlett LLP is serving as legal counsel to Mattress Firm.