Mattress Firm Holding Corp, a specialty retailer of mattresses and related products, has entered into an agreement to acquire The Sleep Train Inc, a West Coast bedding specialty retailer, for $425 million. Mattress Firm has agreed to assume certain additional liabilities totaling about $15 million. Sleep Train operates about 310 specialty mattress retail stores located in California, Oregon, Washington, Idaho, Nevada, and Hawaii, and reported net sales of $471 million for the 2013 fiscal year, according to Furniture Today.
The closing of the acquisition is expected to occur by the end of the fourth fiscal quarter of 2014. Mattress Firm plans to continue to operate under both the Mattress Firm and Sleep Train’s family of brands and will maintain a West Coast corporate headquarters near Sacramento, Calif.
“This unique and transformational opportunity will meaningfully enhance Mattress Firm’s position within the specialty retail bedding industry,” says Steve Stagner, Mattress Firm’s president and CEO, in a release. “The acquisition of Sleep Train will establish Mattress Firm as the first border to border, coast to coast multi-brand mattress specialty retailer in the United States, with pro forma sales approaching $2 billion a year. It allows us to share best practices and integrate two industry leading management teams, positioning Mattress Firm for accelerated growth. Just as importantly, these two companies are ideal partners, aligned on our passion for culture and emphasis on core values. Not only will our employees and shareholders benefit from this union, but the combination of Mattress Firm’s proven relative market share model and strong operating efficiencies with Sleep Train’s exceptional ability to deliver robust sales per store is expected to deliver significant synergies and provide our customers with a greater level of selection, service, and convenience.”
Stagner adds, “We and Sleep Train are excited about the numerous opportunities this acquisition will create for our combined 5,000 employees as well as our vendors, business partners, and shareholders. Upon closing, Dale Carlsen, the chief executive officer of Sleep Train, will become president and chief strategy officer of the company and will join the Mattress Firm Board of Directors as vice chairman. Rob Killgore, chief operating officer of Sleep Train, will become co-chief operating officer of the company with current Mattress Firm chief operating officer, Ken Murphy.”
Carlsen says, “Since 1985, Sleep Train has provided our customers with a good night’s sleep and been a strong partner in our communities. Mattress Firm, through Steve’s leadership, has shown their commitment to their customers and their communities as well. I look forward to bringing our two teams together for the benefit of our customers, our employees, and the communities we serve. Today’s announcement represents the hard work of the Sleep Train employee owners who now together with their Mattress Firm peers will move to transform the bedding retail industry. This compelling, value-enhancing transaction would not have been possible without both companies being so aligned in our culture and our visions. The combination will place our talented team members onto a national platform with enhanced growth and development opportunities. I am excited about our future with the Mattress Firm team and look forward to completing the transaction so that we can realize the benefits for all of our stakeholders.”