Bedding provider Tempur Sealy has agreed to acquire Mattress Firm in a cash-and-stock transaction valued at about $4 billion, the companies said yesterday, according to the Associated Press. Mattress Firm operates more than 2,300 brick-and-mortar retail locations and an e-commerce platfom. After the Tempur Sealy acquistion is complete, the two companies will have a total of some 3,000 retail stores, 30 e-commerce platforms, 71 manufacturing facilities and four research-and-development facilities worldwide. Tempur Sealy will pay about $2.7 billion in cash and $1.3 billion in stock to Mattress Firm, which is partially owned by Steinhoff International Holdings NV. That reflects the issuance of 34.2 million common shares, based on Monday's closing share price of $37.62. The companies expect to complete the transaction in the second half of 2024. After the acquistion is complete, Mattress Firm is set to operate as a separate business unit within Tempur Sealy, which received a request from the Federal Trade Commission for additional information and documents related to the transaction. The company plans to “work cooperatively” with the FTC to complete the acquistion. While Mattress Firm and Tempur Sealy have a long history as retail partners, the two have had a rocky relationship in recent years. The companies temporarily ended their partnership in January 2017 — in a move that notably removed popular Tempur-Pedic beds from Mattress Firm stores. The following year, in August 2018, Tempur-Pedic sued Mattress Firm for allegedly "selling confusingly similar products under the ‘Therapedic’ name, and copying the look and feel of the entire Tempur-Pedic brand and consumer experience." Tempur-Pedic also accused Mattress Firm of continuing to sell Tempur-Pedic mattresses beyond the 2017 end of their partnership. In October 2018, Mattress Firm filed for chapter 11 protection and closed hundreds of stores. At the time, the Houston-based company pointed to years of overexpansion that resulted in “cannibalization” of sales. Mattress Firm’s then-CEO Steve Stagner later resigned in April 2019. Months after Stagner's resignation, Tempur Sealy and Mattress Firm reconciled with a new, long-term supply agreement. In addition to announcing plans to acquire Mattress Firm on Tuesday, Tempur Sealy also reported a first-quarter profit of $85.3 million, or 48 cents per share. Excluding one-time items, earnings were 53 cents per share.
