Tempur Sealy International's $5 billion acquisition of Mattress Firm Group may generate savings significantly exceeding initial estimates. Analysts at Wedbush believe the company could achieve up to three times the originally projected $100 million in synergies through advertising, brand awareness, product innovation, and streamlining the consumer purchasing process.
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With around 75% of Mattress Firm's store locations lacking long-term brand commitments, Tempur Sealy sees opportunities for expansion. The company aims to capture most of these synergies within two to three years, revising its previous four-year timeline.
Wedbush Securities maintains an "Outperform" rating on Tempur Sealy stock with an $80 price target. The company plans to provide further financial details during its Q4 earnings report later this month.
Chairman and CEO Scott Thompson stated that the acquisition will 'unlock incremental benefits for all stakeholders' by advancing the company's U.S. omni-channel strategy. As part of the deal, Tempur Sealy will rebrand as Somnigroup International from 18 February, with Mattress Firm, Dreams, and Tempur Sealy operating as decentralised business units.
Source: www.markets.businessinsider.com