Tempur Sealy has reached a multi-billion-dollar deal that will see the mattress maker acquire retailer Mattress Firm.
The transaction will total roughly $4 billion and involve a mix of both cash and stock for payment. The two companies unveiled the move on Tuesday, with Tempur Sealy’s stock seeing a brief boost amid that news and its quarterly earnings release before settling around $37.75 in the afternoon.
About two-third of the deal’s funding, $2.7 billion, will come from cash, according to the press release on Tempur Sealy’s website. The rest will be $1.3 billion worth of stock.
Tempur Sealy and Mattress Firm projected the closing date for the acquisition will fall within the last six months of 2024. That, the companies said, would be contingent upon the “satisfaction of customary closing conditions and applicable regulatory approvals.”
The Federal Trade Commission has asked for “additional information and documentary material” in connection to the acquisition, the companies disclosed.
Mattress Firm, upon Tempur Sealy’s acquisition, will become a separate business unit. Its addition to Tempur Sealy will help make the company “more competitive by bringing us closer to consumers and facilitating continued innovation,” according to Tempur Sealy CEO Scott Thompson.
The acquisition will bring other changes after its close, with Tempur Sealy saying it will add two Mattress Firm directors to its board. It will also boost the mattress maker’s physical presence, bringing it to a total of “approximately 3,000 retail stores, 30 e-commerce platforms, 71 manufacturing facilities, and 4 state-of-the-art R&D facilities worldwide,” the release said.
Tempur Sealy’s net sales experienced a 2.5% slump from the $1.24 billion it saw in last year’s first quarter, coming in Tuesday at $1.21 billion. Meanwhile, the company said it generated $85.3 million in quarterly net income, dropping 34.7% year-over-year.
Tempur Sealy has been known by that name since 2013, the year the combination of Tempur-Pedic and Sealy occurred.