Here we are, a mere two and a half months into the new year, and it’s been an interesting time filled with mergers, acquisitions and consolidations in the bedding category.
We all know Tempur Sealy International’s $4 billion acquisition of Mattress Firm is making its way through the required regulatory process. That’s expected to close the second half of this year, barring static from the Federal Trade Commission and its ongoing analysis of the deal.
That deal, said to have been in the works for more than seven years now, has been the topic of conversation since I took over this seat in late 2020. Tempur Sealy made it official last May.
Tempur Sealy is currently shopping its 200 Sleep Outfitters stores looking to divest those to cut its store count ahead of the Mattress Firm close.
Fast forward to earlier this month when the news broke that Ashley Home, an affiliate of Ashley Global Retail – yes, that Ashley – was acquiring Resident Home for an undisclosed amount. The possibility of such a deal was bantered about coming out of Las Vegas Market; however, both companies were quiet on the matter.
The deal, they say, makes perfect sense. Ashley’s 2022 bedding sales topped $1 billion, according to the company, and Resident’s 2023 sales were in the $900 million range. The bulk of Ashley’s sales are through brick-and-mortal stores, while 80% of Resident’s sales are generated via direct-to-consumer sales. The deal closed the day after the companies announced it.
While these two mega deals remain hot topics among retailers, bedding manufacturers and suppliers, let’s take a look at the past 12 months. You’ll see that it’s not only the mega mergers that are creating significant consolidation within the industry.
This up-and-down roller coaster ride of mergers and acquisitions was kickstarted back in April 2023 when Canada’s largest sleep retailer Sleep Country Canada bought Casper Sleep’s Canadian business for $20.6 million.
At that time, the Canadian deal (which both companies kept under a top-secret rock with not a leak) was the first of the year. Prior to the deal, Purple’s acquisition of Intellibed in September 2022 in an all-stock deal valued at more than $22 million.
Foam giant Carpenter Co. entered the mergers and acquisition fray in June of last year when it bought Belgium-based Recticel, in a $468 million deal. The deal that was in the works for two years allowed Carpenter to expand its geographic footprint to include Northern Europe, Asia, Africa and North America.
Fast forward to November, and Carpenter was back in the acquisition game with a second deal. This time, the company made a move to acquire family-owned North Carolina-based NCFI Polyurethane’s Consumer Products division. Details of the transaction between the two privately held companies were not disclosed.
November also brought the news that Bedding Industries of America was merging with online luxury mattress brand Saatva. The two companies have long been business partners with Bedding Industries of America and its network of licensees manufacturing Saatva beds.
While you might consider the M&A field might remain quiet for some time, I’m here to tell you that other deals are in the works. I’ve heard of two that are under serious consideration, and neither of those include the Sleep Outfitters stores that Tempur Sealy is looking to divest.
It looks to be time to create an industry mergers-and-acquisition bingo card and start stamping. Who’s in?