From Home Furnishing Business
Mattress Firm To Be Acquired by Steinhoff for $2.4 Billion Creating Largest Multi-Brand Mattress Retail Distribution Network
2016 by in Acquisition, Business Strategy, Industry
Mattress Firm Holding Corp. (NASDAQ: MFRM), the nation's largest mattress retailer, has announced that the they have entered into a definitive merger agreement, with South African furniture retailer Steinhoff International Holdings N.V. which will create the world’s largest multi-brand mattress retail distribution network.
According to the agreement, Steinhoff will acquire Mattress Firm 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. This represents a total equity value of approximately $2.4 billion and an enterprise value of approximately $3.8 billion, including net debt.
The merger agreement has been unanimously approved by the Mattress Firm Board of Directors and the management and supervisory boards of Steinhoff.
Pursuant to the terms of the merger agreement, a wholly owned subsidiary of Steinhoff will commence a tender offer to purchase the outstanding shares of Mattress Firm common stock at a price of $64.00 per share in cash. The acquisition is expected to close by or around the end of the third calendar quarter, subject to regulatory approvals, and satisfaction of a majority tender condition and other customary closing conditions. The transaction is not subject to any financing condition.
At the close of the transaction, Mattress Firm will operate as a subsidiary of Steinhoff from Mattress Firm's current headquarters in Houston, Texas. Both 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 with Mr. Stagner also joining Steinhoff's executive committee.
"The Mattress Firm board believes that the transaction provides significant value to our stockholders through the premium to our share price and the immediate liquidity at closing, while giving Mattress Firm an ideal partner with a proven track record in the complete mattress supply chain including the retail and manufacture of mattresses," said Mr. Stagner.
"This expertise will complement our diverse selection of products provided by our valuable partners. Steinhoff's management team shares our vision for the growth and expansion of Mattress Firm and, as such, we believe they are the right long-term partner for our customers, employees, suppliers and other stakeholders."
"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 Mr. 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."
Steinhoff is an integrated retailer that manufactures, sources and sells furniture, household goods and clothing in Europe, Africa and Australasia. They operate more than 40 brands in 30 countries. Steinhoff has a primary listing on the Frankfurt Stock Exchange and a secondary listing on the Johannesburg Stock Exchange.
"The boards of Steinhoff and its management team are enthusiastic about the opportunities this transaction creates," said Markus Jooste, CEO of Steinhoff. "This transaction will allow Steinhoff to not only enter the U.S. market with an industry leading partner and a national supply chain, but it will also expand Steinhoff's global market reach in the core product category of mattresses. The Mattress Firm brand and specialty retail concept are a strong complement to the Steinhoff group retail brand portfolio in the many geographies where the group operates.
"Steinhoff recognizes the strength of Mattress Firm's experienced and entrepreneurial management team and its proven track record of delivering growth, profitability and leadership in the U.S. retail mattress market. We look forward to welcoming Mattress Firm employees to be part of the one of the world's leading multi-format retailers."
Steinhoff is a leading retailer that manufactures, sources and retails furniture, household goods and clothing in Europe, Africa and Australasia. Retail operations are positioned towards value conscious consumer segments, providing them with affordable products through a vertically integrated supply chain. Steinhoff operates more than 40 brands through 6,500 stores. Steinhoff employs over 100,000 people and has a presence in 30 countries worldwide. Founded in 1964, the company is traded on the Frankfurt Stock Exchange (FSE) and Johannesburg Stock Exchange (JSE) and headquartered in Stellenbosch, South Africa.