Tempur-Pedic to buy mattress rival Sealy
Mattress rivals Tempur-Pedic and Sealy are becoming bedfellows.
Tempur-Pedic, the 20-year-old leader in foam mattresses, is buying 131-year-old rival Sealy for about $228.6 million in cash.
The acquisition comes as competition has increased in the mattress industry, with makers stepping up their marketing and promotions to help lure cost-conscious consumers into making big purchases.
Tempur-Pedic International Inc. said Thursday that it will pay $2.20 per Sealy share, which is a 3 percent premium to the company's Wednesday closing price of $2.14.
Sealy, based in Trinity, N.C., currently has about 103.9 million outstanding shares, according to FactSet. Its stock was up 5 cents, or 2.34 percent, to $2.19 per share in heavy trading Thursday. Volume of more than 27.9 million shares was more than 38 times normal trading in the stock.
Tempur-Pedic says it will also assume or pay back all of Sealy Corp.'s outstanding debt. The Lexington, Ky., company plans to finance the acquisition with debt. Its shares soared $3.86, or 14.41 percent, to close at $30.64, with volume more than seven times normal trading.
The companies put the total value of the deal at $1.3 billion, including debt. They say that the transaction will create a $2.7-billion global bedding company.
"Tempur-Pedic and Sealy together will have products for almost every consumer preference and price point, distribution through all key channels, in-house expertise on most key bedding technologies, and a world-class research and development team," Tempur-Pedic chief executive Mark Sarvary said in a statement.
Tempur-Pedic and Sealy will run independently of each other, with Sealy chief executive Larry Rogers remaining in his position and reporting to Sarvary.
Tempur-Pedic, founded in 1992, makes and distributes mattresses and pillows in more than 80 countries under its Tempur and Tempur-Pedic brands. Sealy, founded in 1881, makes a broad array of spring-coil beds under brands including Stearns & Foster, Sealy, and Sealy Posturepedic.
'If you don't address demand, you don't address the problem' Police are only addressing the supply, but demand is what fuels the illicit sex trade, experts say. Newsday political reporter Bahar Ostadan has the story.
'If you don't address demand, you don't address the problem' Police are only addressing the supply, but demand is what fuels the illicit sex trade, experts say. Newsday political reporter Bahar Ostadan has the story.
