Tempur Sealy International, a leading mattress and bedding provider, announced on Tuesday that it has signed a definitive agreement to acquire Mattress Firm in a stock-and-cash deal valued at approximately $4 billion. The deal is expected to close in the second half of 2024, subject to customary closing conditions, including regulatory approvals.

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The cash consideration of the deal is estimated to be around $2.7 billion, which includes the repayment of Mattress Firm's debt and other items. Additionally, $1.3 billion in stock will be issued to Mattress Firm shareholders, based on 34.2 million shares of common stock at Monday’s closing share price of $37.62.

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Mattress Firm had previously planned to go public, but the company decided to abandon the plans due to “ongoing volatility” in the IPO market. At the time of its IPO filing a little over a year ago, Mattress Firm had $1.2 billion in long-term debt and total liabilities of $3.5 billion.

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The acquisition of Mattress Firm by Tempur Sealy will allow the company to get closer to its customers, according to Tempur Sealy Chairman and CEO Scott Thompson. “This combination will accelerate our growth trajectory and enhance operating cash flow,” Thompson said. “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."

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Mattress Firm's more than 2,300 brick-and-mortar retail stores, e-commerce operations, and sleep education and sleep tracking platforms will complement Tempur Sealy's DTC operations, “enabling a seamless omni-channel ecosystem that meets the needs of more consumers nationwide,” the companies said.

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Tempur Sealy expects to begin realizing various marketing and other synergies by the end of year two and to realize at least $100 million in annual run-rate synergies by the end of year.

Sources: https://www.retaildive.com/news/tempur-sealy-acquires-mattress-firm-4b/649766/