Mattress manufacturing company Tempur Sealy has finalised the acquisition of Mattress Firm, a speciality retailer of mattresses and related products, for $5bn.
Tempur Sealy initially agreed to acquire Mattress Firm in a deal worth $4bn in 2023.
But in 2024 the US Federal Trade Commission voted unanimously to block the deal, citing concerns that it could reduce competition and lead to higher mattress prices.
Tempur Sealy decided to sell more than 100 stores to facilitate regulatory approval for its proposed acquisition of Mattress Firm.
The acquisition was executed through a combination of financial instruments, including $2.7bn in cash considerations, adjusted for Mattress Firm's debt repayment and other standard items and 34.2 million shares of Tempur Sealy common stock.
With this acquisition, Tempur Sealy has announced its intention to rebrand its name to Somnigroup International effective 18 February 2025.
Concurrent with the name change, the company's common stock will commence trading on the New York Stock Exchange under the new ticker symbol "SGI."
Mattress Firm, alongside Dreams and Tempur Sealy, will function as independent business units within Somnigroup International.
Mattress Firm and Dreams will maintain their identities as multi-branded retailers.
Tempur Sealy will persist in its manufacturing role, supplying products to third-party retailers as well as supporting direct-to-consumer channels within Mattress Firm, Dreams and its own operations.
Pro forma financials indicate that the combined entity generated sales of $8bn in the twelve months up to 31 December 2024, after accounting for intercompany transactions.
Sales distribution shows a strong geographic tilt with 85% originating from North America and 15% from international markets.
Direct-to-consumer channels contributed 65% of sales while third-party retailers accounted for the remaining 35%.
Tempur Sealy chairman and CEO Scott Thompson stated: "We have collaborated with Mattress Firm for over 35 years, and we are thrilled to welcome them into the Tempur Sealy, soon Somnigroup, organisation. The addition of Mattress Firm will unlock incremental benefits for all stakeholders by accelerating our US omnichannel strategy.
“This transaction creates a leading global bedding company with extensive manufacturing capabilities and a broader US retail footprint. Together, the companies are positioned to facilitate enhanced product innovation, improve the customer buying experience, and ensure high-quality, durable products are brought to market.”
Coinciding with the transaction's closure, Peter Sachse has been appointed to Tempur Sealy's board of directors from 5 February 2025.
Looking ahead to the second quarter of 2025, Tempur Sealy anticipates completing the divestiture of select retail locations to Mattress Warehouse.
This includes 73 Mattress Firm stores and the Sleep Outfitters subsidiary which encompasses 103 speciality mattress retail locations along with seven distribution centres.
