Bed-in-a-Box Producer Purple to Go Public in $1.1 Billion Deal

July 28, 2017  by Larry Thomas in Business Strategy, Economic News, Industry   

The Utah-based company has signed a letter of intent to pursue a merger with Global Partner Acquisition Corp., a publicly-traded “shell” company that has tentatively agreed to acquire Purple in a deal that gives the mattress producer an enterprise value of $1.1 billion.

By becoming part of a so-called “shell” company that already is publicly traded, Purple would, in effect, become a public company without the expense of an initial public offering.

Under terms of the letter of intent, Global Partner Acquisition (GPAC) would pay $90 million of the purchase price in cash and the rest in rollover equity interests in the combined public company.

GPAC officials said Purple founders Terry and Tony Pearce would remain with the combined company, as would Sam Bernards, Purple’s CEO.

“I believe Purple is a tremendous merger partner for GPAC, given its powerful brand and highly differentiated portfolio of comfort technology solutions,” said Paul Zepf, CEO of GPAC. “The company’s revolutionary products, vertically integrated design and manufacturing expertise, and world-class marketing capabilities ideally position the company to disrupt multiple massive industries that are ripe for innovation.”

Zepf noted that Purple has been profitable since its inception in January 2016.

In a recent investor presentation, the Pearce brothers said their company had sales of more than $50 million last year, and are on a “run rate” of $187 million for 2017, based on second-quarter numbers. 

“We are excited to become a publicly traded company through our merger with GPAC,” said Terry Pearce. “The GPAC team is an ideal partner led by experienced public market investors and executives that will add significant value to Purple. We believe Purple is uniquely positioned in the market and this transaction will allow us to better take advantage of our large market opportunity and continue our rapid, profitable growth.”

While most bed-in-a-box offerings feature a foam mattress, Purple uses a patented material called Hyper-Elastic Polymer. Its products are made at two Utah factories that total 664,000 square feet, and the production equipment also has numerous patents or patents pending.

The company also it known for its clever marketing and high-profile social media presence, especially on YouTube and Facebook.

Earlier this year, the company announced a test-market for its products in select Mattress Firm stores.