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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Sealy Corp. | NYSE:ZZ | NYSE | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2.19 | 0.00 | 01:00:00 |
Tempur-Pedic International Inc. (TPX) agreed to acquire mattress company Sealy Corp. (ZZ) in a deal valued at $229 million that will combine two leading industry rivals with well-known brands.
The deal comes as competition has stepped up lately in the once-sleepy mattress industry, amid a stream of product introductions and promotions as players vie for territory in the high-end bedding market.
Sealy shareholders will receive $2.20 a share, a premium of 2.8% to Wednesday's close. Sealy's shares topped the offer price premarket, up 7.4% at $2.30. Through Wednesday's close, the stock is up 96% this year.
Including debt assumption, the deal is valued at about $1.3 billion.
Sealy Chief Executive Officer Larry Rogers said, "Together, we believe that we can deliver more value than either business could on its own by leveraging our strong combined assets."
The companies will operate separately after the deal closes, which is expected in the first half of next year. The combination is expected to add to earnings in the first full year of operations and the integration is expected to result in cost savings of more than $40 million by the third year, mostly through purchasing, supply chain and increased efficiencies.
Mr. Rogers, Sealy's longtime CEO, will continue to lead that company and report to Tempur-Pedic CEO Mark Sarvary.
Stockholders holding about 51% of Sealy's outstanding common stock have executed a written consent approving the transaction. No further shareholder votes are required.
Tempur-Pedic intends to finance the acquisition through debt financings.
A conference call to discuss further details of the planned acquisition is set for Thursday at 8 a.m. New York time.
Tempur-Pedic shares closed Wednesday at $26.78 and were inactive premarket. The stock is up 29% this year.
Write to Tess Stynes at Tess.Stynes@dowjones.com
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