Tempur Sealy International, Inc. has finalised its acquisition of Mattress Firm Group Inc., the largest mattress speciality retailer in the United States. The deal, valued at approximately $5 billion, cements the company's position as a dominant force in the bedding industry.
As part of its strategic evolution, Tempur Sealy announced a corporate rebranding to Somnigroup International Inc., effective February 18, 2025. The newly formed entity will oversee Mattress Firm, Dreams, and Tempur Sealy as decentralised business units. While Mattress Firm and Dreams will continue as multi-branded retailers, Tempur Sealy will maintain its role as a manufacturer, serving both third-party retailers and direct-to-consumer channels.
On a pro forma basis, the company reported approximately $8 billion in revenue for the twelve months ending December 31, 2024. This includes 85% of sales from North America and 15% from international markets, with direct-to-consumer channels accounting for 65% of total sales.
Chairman and CEO Scott Thompson described the acquisition as a pivotal moment, stating: 'We have collaborated with Mattress Firm for over 35 years, and we are thrilled to welcome them into the Tempur Sealy, soon Somnigroup, organisation. The addition of Mattress Firm will unlock incremental benefits for all stakeholders by accelerating our U.S. omni-channel strategy.' He emphasised that the combined companies will drive innovation, enhance the customer experience, and expand their retail footprint.
In recognition of the acquisition, the company appointed Peter Sachse to its Board of Directors. Sachse brings over 30 years of leadership experience in retail, having served as CEO of Tailored Brands, Inc. and held various executive roles at Macy's. Thompson expressed confidence in Sachse's expertise, noting that his insights will be invaluable as the company enters its next growth phase.
The financial terms of the acquisition included a $2.7 billion cash payment—funded through cash reserves and borrowings—along with 34.2 million shares of common stock. As part of regulatory commitments, Tempur Sealy plans to divest 73 Mattress Firm locations and its Sleep Outfitters subsidiary, comprising 103 speciality mattress retail stores and seven distribution centres, to Mattress Warehouse in Q2 2025.
The company will host a business update call on February 6, 2025, followed by another on February 20, 2025, to discuss its Q4 and full-year financial results. Following the name change, shares of Somnigroup International Inc. will trade under the NYSE ticker symbol "SGI."
Legal counsel for the transaction was provided by Cleary Gottlieb Steen & Hamilton LLP and Beck Redden LLP, with J.P. Morgan Securities LLC acting as financial advisor to Tempur Sealy. Mattress Firm was advised by Simpson Thacher & Bartlett LLP, Goldman Sachs & Co. LLC, Barclays, and Jefferies LLC.
Thompson extended his gratitude to employees, suppliers, and shareholders, crediting their support for the company's continued success. He highlighted the 80% surge in stock price since the acquisition's announcement as a reflection of investor confidence in its long-term strategy.
More information:
Tempur Sealy
www.tempursealy.com