Mattress Firm acquired by Tempur Sealy for A$8b
Tempur Sealy has finalised its $5 billion ($8 billion) acquisition of Mattress Firm, creating the world’s largest bedding company. The deal, funded through cash, borrowings, and stock, will see the company rebrand as Somnigroup International from February 18.
Transaction snapshot
Deal value: US$5 billion ($8 billion)
Deal multiples: N/A
Deal type: Acquisition
Investors: Funded through $2.7 billion ($4.3 billion) in cash, existing borrowings, and 34.2 million shares of common stock
From February 18, Somnigroup will operate Tempur Sealy, Dreams, and Mattress Firm as separate business units.
To address regulatory concerns, the company will divest 73 Mattress Firm stores and the Sleep Outfitters subsidiary, which includes 103 stores, in Q2 2025.
A U.S. District Court ruling in January cleared the path for the deal by rejecting the Federal Trade Commission’s injunction request. The FTC had argued the acquisition would reduce competition and increase mattress prices for consumers.
Despite operating independently, the business units will benefit from economies of scale, according to CEO Scott Thompson. He emphasised the company’s strengthened competitive position, with capabilities spanning design, manufacturing, distribution, and retail.
Tempur Sealy was previously a manufacturer, but the acquisition brings it closer to consumers through Mattress Firm’s retail footprint. Some stores will be refreshed to improve customer experience.
Following Mattress Firm’s previous bankruptcy and store closures, the retailer is now stronger, having gained market share during a challenging period for the industry. Thompson noted that competitors have struggled, positioning Mattress Firm for future growth as market conditions stabilise.
In 2024, the company reported pro forma sales of approximately US$8 billion ($12.77 billion), with 85% from North America and 15% from other regions. Direct-to-consumer channels accounted for 65% of sales, while third-party retailers made up the remaining 35%.
