Lexington, Kentucky and Trinity, North Carolina -- Tempur-Pedic International Inc., a manufacturer, marketer and distributor of foam mattresses and pillows, and bedding manufacturer Sealy Corp., announced 27 Sept that they will create a $2.7 billion global bedding provider.
The deal brings together "two highly complementary companies with iconic brands and significant opportunities for global innovation and growth," said a joint statement from the two companies.
Founded in 1992, Tempur-Pedic is well known for its proprietary Tempur pressure-relieving material in over 80 countries. Sealy, with roots dating back to 1881 is a well known manufacturer of high-quality mattresses and foundations with a portfolio of well-known bedding brands, including Sealy Posturepedic, and Stearns & Foster.
The transaction has been approved by both side's boards. Stockholders with about 51 percent of Sealy's stock have agreed the transaction. Tempur-Pedic will acquire all of Sealy's stock of Seay for $2.20/share.
Tempur-Pedic will also assume or repay all of Sealy's outstanding debt, valued at about $1.3 billion.
The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close during the first half of 2013.
Tempur-Pedic Chief Executive Officer Mark Sarvary said: "This is a transformational deal that brings together two great companies, each with globally recognized brands. 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. In addition, our global footprint will span over 80 countries. The shared know-how and improved efficiencies of the combined company will result in tremendous value for our consumers, retailers and shareholders."
Tempur-Pedic and Sealy will operate independently. Larry Rogers, chief executive officer of Sealy, who has been with Sealy for 33 years, will remain ceo of Sealy and report to Sarvary.
Rogers said, "The complementary product and market fit of these two companies deliver a unique opportunity to create the first full spectrum, global bedding company that addresses all market segments and consumer preferences. Together, we believe that we can deliver more value than either business could on its own by leveraging our strong combined assets."