Mattress Firm To Acquire Sleepy's In $780 Million Deal

Houston-based Mattress Firm Holding Corp. said Monday it has agreed to buy HMK Mattress Holdings, the parent company of Sleepy's mattress retailer, for $780 million. The deal is expected to close during the first half of fiscal 2016, Mattress Firm said. The company has agreed to assume liabilities around $30 million. Mattress Firm expects the deal to generate annual synergies of approximately $40 million by its third year after the close, it said in a statement. The company plans to continue to operate under both the Mattress Firm and Sleepy's brands in the near term. In a separate statement, Mattress Firm reported preliminary net sales of $699.5 million, up 51% year-over-year, in the fiscal third quarter, and said it expects adjusted earnings between 80 cents a share and 82 cents a share in the quarter. Mattress Firm is expected report full fiscal third-quarter results Dec. 7. Analysts polled by FactSet had expected Mattress Firm to report adjusted earnings of 77 cents a share on sales of $647 million. Mattress Firm shares were halted late Monday after ending the regular trading day down 3%.

Copyright © 2015 MarketWatch, Inc.