Canada's
leading sleep partner announces that it has signed a definitive
agreement to acquire Silk & Snow Inc. ("Silk &
Snow"), recognized as one of Canada's fastest growing online retailers of
thoughtfully made sleep essentials
TORONTO, Dec. 20,
2022 /CNW/ - Sleep Country Canada Holdings Inc.
("Sleep Country" or the Company) (TSX: ZZZ), Canada's leading omnichannel specialty sleep
retailer, today announced its intention to acquire 100 % ownership
of Silk & Snow, one of Canada's fastest growing direct-to-consumer
sleep brands specializing in high-quality sleep and lifestyle
products that have been thoughtfully curated.
Following a successful Kickstarter campaign in 2017, Silk &
Snow launched its ecommerce site www.silkandsnow.com with its
made-in-Canada single memory foam
mattress. Co-founded by Albert
Chow, and Kenneth Mo, with a
dream to create the perfect mattress – made locally and delivered
to your door in a box – the Company has grown into a one-stop,
curated lifestyle brand offering mattresses, furniture, bed
essentials and its new bath lineup. For three consecutive years,
Silk & Snow has been ranked as one of the fastest growing
companies in Canada. In 2020, Silk
& Snow made Canadian Business' top 10 start-up list ranking of
Canada's Fastest Growing Companies
and in 2021 and 2022 was ranked one of Canada's top growing companies by the Globe
& Mail. Silk & Snow has also made inroads into
the U.S. market which accounts for ~25% of sales in the most recent
fiscal year.
"We are delighted to welcome Silk & Snow to our growing
family of powerful sleep brands as we continue to build our
sleep ecosystem with investments in people, product and channel
innovation to provide customers with seamless access to the world's
leading assortment of sleep essentials," said Stewart Schaefer, President and CEO, Sleep
Country Canada. "Albert, Kenneth, and the Silk &
Snow team have thoughtfully procured a full array of affordable
luxury items that have helped turn their brand into a high-growth
business with an impressive following in both Canada and the United States. Their
purpose-driven approach to product design, manufacturing, and
digital marketing aligns beautifully with our strategic road map
and expansion of sustainable products, and into new markets.
We look forward to supporting Silk & Snow as the brand aims to
continue its incredible growth trajectory," added Schaefer.
"We're proud of what our team has been able to build here at
Silk & Snow," said Albert Chow,
CEO, and Co-Founder. "We started Silk & Snow with the intention
of providing high-quality products that allow our customers to love
their homes. Five years later, with quality as a top priority,
we've delivered on our promise of building a brand that offers
thoughtfully made sleep products."
"It was important for us to find a partner with Canadian roots,"
said Kenneth Mo, COO, and
Co-Founder. "We're looking forward to partnering with Sleep
Country, Canada's leading sleep
retailer, as it allows us to lean on their incredible expertise.
This will help us to continue to expand our well-loved range
of mattresses, bedding, furniture and bath products, while bringing
even more value to our customers."
Silk & Snow will operate as an independent entity within
Sleep Country, led by Chow as CEO and Mo as COO who both will join
the Sleep Country's senior leadership team.
Transaction Details and Advisors:
Sleep Country has agreed to acquire substantially all of the
assets of Silk & Snow. Sleep Country will pay ~$24.0 million in cash at closing and has agreed
to pay up to an additional $19.45
million in cash in early 2026 based on Silk and Snow
achieving certain growth and profitability targets in aggregate for
fiscal years 2023, 2024 and 2025. The transaction will be
financed through Sleep Country's cash on hand and revolving credit
facility.
Subject to customary closing conditions, the transaction is
expected to close effective January 1,
2023.
Stifel GMP served as exclusive financial advisor to Silk &
Snow.
Fasken Martineau DuMoulin LLP served as legal counsel to Silk
& Snow.
Davies Ward Philips &
Vineberg LLP served as legal counsel for Sleep Country Canada.
About Sleep Country
Sleep Country is Canada's leading specialty sleep retailer with
a national retail store network and multiple robust eCommerce
platforms. The Company has 289 corporate-owned stores and 20
warehouses across Canada and
operates under retail banners: "Sleep Country Canada", with
omnichannel operations in Canada
excluding Québec; "Dormez-vous" with omnichannel operations in
Québec; "Endy", Canada's leading
direct-to-consumer online sleep solutions retailer; and recently
acquired "Hush", one of Canada's
fastest-growing digital retailers. Recognized as one of
Canada's Most Admired Corporate
Cultures in 2022 by Waterstone Human Capital, Sleep Country is a
purpose-led organization dedicated to transforming lives by
awakening Canadians to the power of sleep and is committed to
building a company culture of inclusion and diversity where
differences are embraced and valued. The Company meaningfully and
positively supports its environment and the communities where it
operates through its comprehensive mattress and foundation
recycling program that keeps mattresses out of landfills, as well
as its bed donation program that contributes new and gently used
mattresses and foundations to Canadian charities to help families
and children in need get a good night's sleep. For more information
about Sleep Country, please visit www.sleepcountry.ca.
About Silk & Snow
Silk & Snow is a leading digitally native retailer of
thoughtfully made sleep essentials. Headquartered in
Toronto, the Company was founded
in 2017 from a successful Kickstarter campaign. Built on
three core guiding principles – Better Materials, Thoughtful
Manufacturing and Transparency – Silk & Snow offers
high-quality sleep and lifestyle products crafted from traceable
raw materials and sustainable manufacturing practices. Their
curated line includes bed sheets, mattresses, bed frames, weighted
blankets, and other home essentials alongside its bath line-up of
bath towels and robes. The Company made Canadian Business'
top ten start-up list in 2020 and was ranked one of Canada's fastest growing businesses by the
Globe and Mail for 2021 and 2022.
For more information about Sleep Country Canada, visit
www.sleepcountryir.ca
For more information about Silk & Snow, visit
www.silkandsnow.com
Non-IFRS and Other Measures
This news release refers
to certain measures that are not recognized under IFRS and do not
have a standardized meaning prescribed by IFRS, including "Same
Store Sales" or "SSS", "EBITDA", "Operating EBITDA", "Operating
EBITDA margin", "Adjusted net income attributable to the Company",
"Basic adjusted EPS" and "Diluted adjusted EPS". For more
information on these Non-IFRS and other measures as well as a
reconciliation to the most comparable IFRS measure, refer to
"Non-IFRS and Other Measures" in the Company's MD&A for Q3 2022
which is available on SEDAR at www.sedar.com.
Forward-Looking Information
Certain information in this news release contains
forward-looking information and forward-looking statements which
reflect the current view of management with respect to the
Company's objectives, plans, goals, strategies, outlook, results of
operations, financial and operating performance, prospects and
opportunities. Wherever used, the words "may", "will",
"anticipate", "intend", "estimate", "expect", "plan", "believe" and
similar expressions identify forward-looking information and
forward-looking statements. Forward-looking information and
forward-looking statements should not be read as guarantees of
future events, performance or results, and will not necessarily be
accurate indications of whether, or the times at which, such
events, performance or results will be achieved. All of the
information in this news release containing forward-looking
information or forward-looking statements is qualified by these
cautionary statements.
Forward-looking information and forward-looking statements are
based on information available to management at the time they are
made, underlying estimates, opinions and assumptions made by
management and management's current good faith belief with respect
to future strategies, prospects, events, performance and results,
and are subject to inherent risks and uncertainties surrounding
future expectations generally. Such risks and uncertainties
include, but are not limited to, those described below under the
sections "Risk Factors" and those described in the Company's 2021
annual information form (the "AIF") filed on March 3, 2022. A copy of the AIF can be accessed
under the Company's profile on SEDAR at www.sedar.com. Additional
risks and uncertainties not presently known to the Company or that
the Company currently believes to be less significant may also
adversely affect the Company.
Readers are urged to consider the risks, uncertainties, and
assumptions carefully in evaluating the forward-looking information
and forward-looking statements and are cautioned not to place undue
reliance on such information and statements. The Company does not
undertake to update any such forward-looking information or
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by applicable
laws.
SOURCE Sleep Country Canada Holdings Inc. Investor Relations