LEXINGTON, Ky., Jan. 24, 2020 /PRNewswire/ -- Tempur Sealy
International, Inc. (NYSE: TPX, "Company" or "Tempur
Sealy") today announced that it has signed a definitive
agreement to acquire a majority ownership interest in a newly
formed limited liability company which will contain at closing
substantially all of the assets of Sherwood Acquisition Holdings,
LLC ("Sherwood Bedding"), a leading
manufacturer in the U.S. private label/original equipment
manufacturer ("OEM") bedding market. Sherwood Bedding operates four manufacturing
facilities and is a top 10 U.S. bedding producer. Tempur Sealy's
expected stake in Sherwood Bedding
will mark the Company's entrance into the private label category,
creating a complete suite of product offerings ranging from
Sherwood Bedding's non-branded
private label products to the Company's well-known branded
products, including Tempur-Pedic®, Sealy®,
and Stearns & Foster®.
The Company expects to purchase an 80% stake in Sherwood Bedding for approximately $40 million. The transaction will be financed
through a combination of cash on hand and a borrowing under its
existing credit facilities. The Ellman Family, a third-generation
bedding manufacturer, will maintain a 20% ownership interest in
Sherwood Bedding. Sherwood Bedding will be operated as a
standalone, independent business unit within the Company and will
continue to be led by its current management team. The
transaction is expected to close within the first quarter of
2020.
Sherwood Bedding is a low-cost,
high-value producer of private label and OEM products for
third-party retailers and in the contract bedding market.
Sherwood Bedding has estimated
annual wholesale revenues of over $150
million and expects to fund its own future growth and be
accretive to the Company's earnings in 2020. The Company believes
that over time cost synergies can be realized to benefit all brands
and customers. No personnel reductions are expected.
Tempur Sealy International, Inc. Chairman and CEO Scott Thompson commented, "Over the past nine
years Sherwood Bedding has grown to
become one of the most respected bedding producers in the industry.
Sherwood Bedding's flexible and
efficient operating model, focused primarily on value and high
velocity price points, complements Tempur Sealy's iconic brands,
powerful distribution model, and supply chain. Together, we believe
that we can build upon existing relationships to deliver more
compelling products, branded and non-branded, than either business
could on its own."
Sherwood Bedding Co-President Neil
Ellman commented, "With Tempur Sealy being the dominant
player in the U.S. bedding industry, we believe we have the perfect
partner to acquire market share in the private label sector. The
complementary knowledge and market-fit of the companies as well as
the ability to improve upon our low-cost structure delivers a
unique opportunity and provides us with a sustainable competitive
advantage."
Forward-Looking Statements
This press release contains statements that may be characterized
as "forward-looking" within the meaning of the federal securities
laws, which includes information concerning one or more of the
Company's plans, objectives, goals, strategies, and other
information that is not historical information. When used in this
release, the words "believes," "expects," "will," and variations of
such words or similar expressions are intended to identify such
statements. These forward-looking statements include, without
limitation, statements relating to the Company's expectations
regarding Sherwood Bedding's
on-going operations and future growth, cost synergies, personnel
and the impact of the anticipated acquisition on the Company's
brands, products, customer base, results of operations or financial
position. Any forward-looking statements contained herein are based
upon current expectations and beliefs and various assumptions.
There can be no assurance that the Company will realize these
expectations or that these beliefs will prove correct.
Numerous factors, many of which are beyond the Company's
control, could cause actual results to differ materially from any
that may be expressed as forward-looking statements. These risk
factors include risks associated with Sherwood Bedding's ongoing operations; the
possibility that the acquisition will not occur; the possibility
that the expected benefits of the acquisition are not realized when
expected or at all; general economic, financial and industry
conditions, particularly conditions relating to the financial
performance and related credit issues present in the retail sector,
as well as consumer confidence and the availability of consumer
financing; the impact of the macroeconomic environment in both the
U.S. and internationally on Sherwood
Bedding and the Company; uncertainties arising from national
and global events; industry competition; the effects of
consolidation of retailers on revenues and costs; and consumer
acceptance and changes in demand for Sherwood Bedding's and the Company's
products.
Other potential risk factors include the risk factors discussed
under the heading "Risk Factors" under ITEM 1A of Part 1 of the
Company's Annual Report on Form 10-K for the year ended
December 31, 2018. There may be other
factors that may cause actual results to differ materially from the
forward-looking statements contained herein. The Company undertakes
no obligation to update any forward-looking statement contained
herein to reflect events or circumstances after the date on which
such statement is made.
About Tempur Sealy International, Inc.
Tempur Sealy International, Inc. (NYSE: TPX) develops,
manufactures, and markets mattresses, foundations, pillows and
other products. The Company's products are sold worldwide
through third-party retailers, its own stores, and online. The
Company's brand portfolio includes many highly recognized brands in
the industry, including Tempur®, Tempur-Pedic®, Sealy® featuring
Posturepedic® Technology, and Stearns & Foster®. World
headquarters for Tempur Sealy International is in Lexington, KY. For more information,
visit http://www.tempursealy.com or call
800-805-3635.
About Sherwood Bedding
Sherwood Bedding, an
independently owned bedding manufacturer, operates four
manufacturing facilities across the U.S. and serves as a
manufacturing partner for several retailers and the hospitality
trade. With its world-class manufacturing facilities, Sherwood Bedding has implemented various
manufacturing and operating initiatives to create efficiencies and
enhance the value proposition offered to the retailer as well as
the end consumer without sacrificing quality and service levels.
For more information, visit http://sherwoodbedding.com.
Investor Relations Contact
Aubrey Moore
Investor Relations
Tempur Sealy International, Inc.
800-805-3635
Investor.relations@tempursealy.com
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SOURCE Tempur Sealy International, Inc.