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Tempur Sealy to Acquire Mattress Firm in a Deal Worth $4 Billion
May 9,
2023 by HFBusiness Staff in Business Strategy, Industry 
Bedding provider Tempur Sealy has agreed to acquire Mattress Firm in a cash-and stock-transaction valued at about $4 billion, the companies said Tuesday.
Mattress Firm operates more than 2,300 brick-and-mortar retail locations and an e-commerce platform. After the Tempur Sealy acquisition is complete, the two companies will have a total of some 3,000 retail stores, 30 e-commerce platforms, 71 manufacturing facilities and four research and development facilities worldwide.
“This combination will accelerate our growth trajectory and enhance operating cash flow,” Tempur Sealy Chairman and CEO Scott Thompson said in a statement. “Mattress Firm has been a valued retail partner for more than 35 years, and we look forward to welcoming their talented workforce of more than 8,100 employees to the Tempur Sealy family.”
Mattress Firm CEO John Eck added that the transaction will increase the companies' ability "to better address consumers’ needs and drive growth.”
Tempur Sealy will pay about $2.7 billion in cash and $1.3 billion in stock to Mattress Firm, which is partially owned by Steinhoff International Holdings NV. That reflects the issuance of 34.2 million common shares, based on Monday's closing share price of $37.62.
After the transaction is complete, Mattress Firm shareholders will own about 16.6% of the combined company and Tempur Sealy shareholders will own the rest.
The companies expect to complete the transaction in the second half of 2024. After the acquisition is complete, Mattress Firm is set to operate as a separate business unit within Tempur Sealy.
Tempur Sealy received a request from the Federal Trade Commission for additional information and documents related to the transaction. The company plans to “work cooperatively” with the FTC to complete the acquisition.
Piper Sandler said in a note Tuesday the prospect of Tempur Sealy acquiring Mattress Firm “has been discussed for many, many months within the industry.” The investment banking and research firm expects a long FTC review process, noting that the transaction marks a “seismic deal for the mattress industry.”
In addition to announcing plans to acquire Mattress Firm on Tuesday, Tempur Sealy also reported a first-quarter profit of $85.3 million, or 48 cents per share. Excluding one-time items, earnings were 53 cents per share.
The Kentucky-based mattress maker said revenue slipped 2.5% to $1.21 billion from $1.24 billion.