Financial holdings company Fairfax has agreed to acquire speciality mattress retailer Sleep Country Canada Holdings for an enterprise value of C$1.7bn ($1.23bn).
The acquisition will be conducted through Fairfax's newly formed and wholly owned subsidiary, 16133258 Canada, which will purchase all outstanding common shares of Sleep Country for $35 each in cash.
The retailer operates under banners including Sleep Country Canada, Dormez-vous, Endy, Silk & Snow, Hush and Casper Canada.
Sleep Country operates 307 corporate-owned stores, 18 warehouses and e-commerce across Canada.
The purchase price offers a 34% premium over the 20-day volume-weighted average price of Sleep Country's common shares on the Toronto Stock Exchange (TSX) as of 19 July 2024, and a 28% premium on the closing price of the same date.
The transaction, to be finalised in the fourth quarter of 2024, will be executed via a court-approved plan of arrangement under the Canada Business Corporations Act.
It is subject to customary conditions, including approvals from shareholders and the court, and regulatory clearance under the Competition Act (Canada). The deal's completion does not hinge on financing conditions.
Upon closure, Sleep Country aims to delist its common shares from the TSX and will no longer be a reporting issuer under Canadian securities laws.
Fairfax chairman and CEO Prem Watsa said: "We are thrilled to have Sleep Country and its talented team led by Stewart Schaefer join the Fairfax Group. Sleep Country is Canada's leading sleep retailer with brands that are recognised by all Canadians. We look forward to working with Stewart and the entire Sleep Country team to further develop this remarkable Canadian success story over the long term."
