The world's largest bedding manufacturer, Tempur Sealy, announced Tuesday that it is buying Mattress Firm in a deal valued at about $4 billion.
Founded in 1986, Mattress Firm is the largest bedding retailer in the U.S. with over 2,300 brick-and-mortar retail locations and a growing e-commerce business.
Together, Tempur Sealy and Mattress Firm's combined global footprint will include roughly 3,000 retail stores, 30 e-commerce platforms, 71 manufacturing facilities, and four research and development facilities worldwide. The companies will also combine forces, building a global workforce of more than 21,000 employees.
Tempur Sealy said Mattress Firm will operate as a separate business within the company to complement product development and manufacturing capabilities.
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"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 (earnings per share) growth," Tempur Sealy chairman and CEO Scott Thompson said in a statement. "This acquisition will make Tempur Sealy more competitive by bringing us closer to consumers and facilitating continued innovation."
Mattress Firm president and CEO John Eck added that the merger will increase both companies' ability to "better address consumers’ needs and drive growth."
Tempur Sealy will pay Mattress Firm about $2.7 billion in cash and $1.3 billion in stock consideration to Mattress Firm shareholders. That reflects the issuance of 34.2 million common shares based on Monday's closing share price of $37.62.
Once the deal is complete, Mattress Firm shareholders will own about 16.6% of the company, while Tempur Sealy shareholders will own the rest.
The transaction is subject to regulatory approval and is expected to close in the second half of next year.
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