In advance of its planned acquisition of Mattress Firm, Tempur Sealy International has found a buyer for the Sleep Outfitters locations it has been trying to sell off since late last year. This bidder is well-known.
Mattress Warehouse, a company based in Fredrick, Maryland, has agreed to purchase the 107 Sleep Outfitters stores, 73 Mattress Firm sites, and seven distribution centers through MW SO Holdings Company. Mattress Warehouse has been opening stores for the past few years.
The agreement is contingent upon the completion of Tempur Sealy’s $4 billion proposed acquisition of Mattress Firm, which the Federal Trade Commission is contesting in federal court.
According to Scott Thompson, chairman and CEO of Tempur Sealy, “we conducted a divestiture process as part of our engagement with the FTC on the proposed acquisition of Mattress Firm, which led to an agreement with Mattress Warehouse, a company with extensive mattress retail experience, a strong capital base, and a capable leadership team.”
Furniture Today has been informed that depositions with additional mattress manufacturers, some of which lasted up to seven hours, have been taking place over the past few weeks, and that the FTC case is currently being processed. The hearings in Houston are set to start on November 12. In a statement, Tempur Sealy expressed confidence that the Mattress Firm acquisition will proceed and that a “successful litigation process can be completed in the coming months.”
“We are excited to welcome these stores and their talented teams into the Mattress Warehouse family,” said Bill Papettas, CEO of Mattress Warehouse. “With our proven track record of growth and operational excellence, we are confident in the successful integration of these new locations into our expanding portfolio. This acquisition not only strengthens our market position, but also enhances opportunities for our team members, vendor partners and, most importantly, our customers, helping them live better lives through quality sleep.”
As of right now, Mattress Warehouse runs over 320 locations, and by 2028, it hopes to have 500 locations under its belt. The business said in 2023 that it would be opening 20 to 30 new locations annually.
Mattress Warehouse CEO Bill Papettas stated, “We are thrilled to welcome these stores and their talented teams into the Mattress Warehouse family.” “We have a track record of expansion and operational excellence, so we are certain that these new locations will successfully join our growing portfolio. Our market position is strengthened by this acquisition, which also creates more chances for our team members, vendor partners, and—above all—our consumers, who benefit from greater sleep and lead happier lives.
The completion of Tempur Sealy’s acquisition of Mattress Firm and other usual closing conditions are prerequisites to the divestment. About a quarter following the Mattress Firm transaction’s closure, it is anticipated to close.
After this divestment and the Mattress Firm purchase close, Tempur Sealy plans to run over 2,800 retail locations globally, with the Mattress Firm business accounting for half of its North American sales. After concluding the Mattress Firm transaction, Tempur Sealy still anticipates realizing $100 million in annual run-rate synergies by the end of the fourth year.
In other news, Tempur Sealy disclosed plans to borrow up to $1.6 billion through a term loan B, which would aid in financing the company’s acquisition of Mattress Firm.
