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Tempur-Pedic buys Sealy
LEXINGTON, Ky. -- Mattress company Tempur-Pedic is buying rival Sealy for about US$228.6 million in cash while also taking on hundreds of millions more in Sealy debt.
Tempur-Pedic International Inc. said Thursday it will pay $2.20 per Sealy share, which is a three per cent premium to the company's Wednesday closing price of $2.14.
Sealy, based in Trinity, N.C., has about 103.9 million outstanding shares, according to FactSet. Its stock jumped 21 cents, or 9.8 per cent, to $2.35 in pre-market trading.
Tempur-Pedic says it will also assume or pay back all of Sealy Corp.'s outstanding debt. The Lexington, Ky., company plans to finance the acquisition with debt. Its shares gained $1.32, or 4.9 per cent, to $28.10 before the market open.
The companies put the total value of the deal at $1.3 billion, including debt. They say the transaction will create a $2.7-billion global bedding provider.
Sealy operates 25 plants that manufacture bedding in 20 U.S. states, three Canadian provinces, Mexico, Puerto Rico, Brazil, Argentina, France and Italy, the firm's website says.
"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," Tempur-Pedic CEO Mark Sarvary said in a statement.
Tempur-Pedic and Sealy will run independently of each other, with Sealy's CEO Larry Rogers remaining in that position. Rogers will report to Sarvary.
Tempur-Pedic, founded in 1992, makes and distributes mattresses and pillows in more than 80 countries under its Tempur and Tempur-Pedic brands. Sealy, founded in 1881, makes mattresses under brands including Stearns & Foster, Sealy and Sealy Posturepedic.
While Tempur-Pedic has a particularly strong presence in North America, Europe and Asia, Sealy has a strong presence in North America, Asia and Argentina.
Both companies' boards have approved the buyout.
-- The Associated Press, with files from The Canadian Press
Republished from the Winnipeg Free Press print edition September 28, 2012 B7
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