Tempur Sealy International announced May 9 that it is acquiring Houston-based Mattress Firm for $4 billion in cash and stock.
Founded in 1986, Mattress Firm is the largest mattress specialty retailer in the U.S. with more than 2,300 brick-and-mortar outlets. The combined companies, once the transaction passes antitrust muster, will operate more than 3,000 retail stores, 30 e-commerce platforms, 71 manufacturing facilities and four research and development facilities worldwide.
Based in Lexington, Kentucky, Tempur Sealy tapped Cleary Gottlieb Steen & Hamilton in New York for outside counsel. Mattress Firm was advised from New York by Simpson Thacher & Bartlett while Sidley Chicago partners Gary Gerstman and Matthew Johnson represented Mattress Firm management.
On the financial side, J.P. Morgan Securities is serving as sole financial advisor to Tempur Sealy, while Mattress Firm was advised by Goldman Sachs, Barclays and Jefferies.
Although no Texas lawyers were involved as outside counsel, the deal was guided in-house at Mattress Firm by general counsel Kindel Nuno, senior vice president and legal counsel Daria Russell and director corporate counsel Shruti Patel.
Mattress Firm has been owned since 2016 by the South African investment firm Steinhoff International Holdings NV. Mattress firm filed for Chapter 11 bankruptcy in October 2018, but emerged from federal protection less than two months later with a group of creditors owning slightly less than 50% of the company.
Under terms of the merger, Tempur Sealy will pay approximately $2.7 billion in cash and 34.2 million shares of Tempur Sealy valued at $1.3 billion as of market closing May 8. If the deal clears antitrust approvals Mattress Firm stockholders will own 16.6 percent of the combined company with Tempur Sealy stockholders retaining 83.4 percent.