Tempur Sealy International ("Tempur Sealy") and Mattress Firm Group  ("Mattress Firm") have announced that Tempur Sealy has signed a definitive agreement to acquire Mattress Firm, the nation's largest mattress specialty retailer, in a cash and stock transaction valued at approximately $4.0 billion.

The transaction is expected to be funded by approximately $2.7 billion of cash consideration (subject to adjustments, including the repayment of Mattress Firm's debt and other customary items) and $1.3 billion in stock consideration issued to Mattress Firm shareholders, reflecting the issuance of 34.2 million shares of common stock based on the closing share price of $37.62 as of May 8, 2023. The transaction is currently anticipated to close in the second half of 2024, subject to the satisfaction of customary closing conditions, including applicable regulatory approvals. Following the close of the transaction, Mattress Firm is expected to operate as a separate business unit within the company.

Founded in 1986, Mattress Firm is the largest mattress specialty retailer in the US, operating over 2,300 brick-and-mortar retail locations and a growing e-commerce platform. Mattress Firm's more than 6,200 highly trained retail sales associates provide personalised service to help consumers choose the ideal bedding products across their robust assortment of market-leading brands.

This combination will complement Tempur Sealy's extensive product development and manufacturing capabilities with vertically integrated retail. Together, Tempur Sealy and Mattress Firm's combined global footprint will include approximately 3,000 retail stores, 30 e-commerce platforms, 71 manufacturing facilities, and 4 state-of-the-art R&D facilities worldwide. These combined operations will be supported by more than 21,000 best-in-class employees with a collective focus on providing breakthrough sleep solutions to consumers in over 100 countries.

"This transaction advances all four of our key long-term initiatives: to develop the highest quality bedding products, promote brands with compelling marketing, optimise our diverse omni-channel distribution platform, and drive EPS growth. Consistent with our M&A strategy, this acquisition will make Tempur Sealy more competitive by bringing us closer to consumers and facilitating continued innovation,” Tempur Sealy, chairman and CEO Scott Thompson said.

"We are excited by the long-term growth prospects for our global vertically integrated company. This combination will accelerate our growth trajectory and enhance operating cash flow. Mattress Firm has been a valued retail partner for more than 35 years, and we look forward to welcoming their talented workforce of more than 8,100 employees to the Tempur Sealy family,” Thompson concluded.

"We know that every customer has unique needs and wants when it comes to a sleep solution that is perfect for them. As part of Tempur Sealy, our customers will benefit from our combined portfolio of highly recognised brands and products, extensive omni-channel capabilities, industry leading innovation and best-in-class teams. Under Tempur Sealy's leadership, our combined company will be in a unique position to take advantage of our shared values and complementary capabilities to better address consumers' needs and drive growth,” Mattress Firm CEO John Eck said.