Deal for 1.3 billion to buy 131-year-old company
San Francisco, CA -- (SBWIRE) -- 10/16/2012 -- Sealy, which survived the Great Depression, a two World Wars, the recession of the 70s, and even the most recent wave of recession has finally succumb to the weight of monetary stress, and is being bought by rival Tempur-Pedic for $1.24 billion.
The Sealy company has lasted over 131 years, while Tempur-Pedic International was founded in 1992. The latter designs mattresses based on the material developed by NASA scientists in the 1970s to cushion the pressure felt during lift-off. The foam shapes to the body as pressure is added, and evenly distributes the correct formation to body-weight placement.
Sealy began in 1881, when Daniel Haynes created a cotton-filled mattress in Sealy, Texas. Soon he had made more orders, and fifteen years later he patented the company Sealy, which went on to become the first to offer the king-sized mattress.
Silent Night is the license to Sealy products in England. Steve Freeman, the managing director of Silent Night, stated that the challenges of the bedding market have been extensive, given the current financial downturn. Customers are much less likely to replace mattresses when money is tight. When they do make a change, it appears to be toward a high-end foam mattress.
The deal was approved by the two company boards, as well as the private equity firm, Kohlberg Kravis Roberts, which owns 44% of Sealy.
Tempur-Pedic will foot payment of $2.20 per share for the remainder of the Sealy stock.
Tempur-Pedic was worth $1.6 billion before the deal. Sealy had been estimated at $220 million at the time of the deal.
The deal caused Tempur-Pedic to jump 14.41% and close at $30.64 a share. Sealy, whose Wall Street ticker is “ZZ” rose 2.3% to 2.19.
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