Bullish indicating open at $55-$60, IPO prices at $37
LEXINGTON, Ky. - Tempur Sealy International, Inc. (NYSE: TPX), currently valued at $11.34 billion by market capitalization, has finalized the acquisition of Mattress Firm Group Inc., the largest specialty mattress retailer in the United States. In conjunction with this development, the company announced a forthcoming name change to Somnigroup International Inc., effective February 18, 2025. According to InvestingPro data, the company maintains a "GOOD" overall financial health score, suggesting strong positioning for this strategic move. Tempur Sealy, Mattress Firm, and Dreams will operate as individual units under the new corporate structure, with a continued focus on multi-branded retail and direct-to-consumer sales channels.
The acquisition, which has a total purchase price of approximately $5 billion, was funded through a mix of cash and stock, with Tempur Sealy issuing 34.2 million shares of common stock and utilizing $2.7 billion in cash. This strategic move is expected to accelerate the company’s omni-channel strategy in the U.S. and enhance its global presence.
Post-acquisition, the combined entity reported pro forma sales of around $8 billion for the twelve months ending December 31, 2024. The sales distribution indicates a significant majority of approximately 85% in North America, with direct-to-consumer channels accounting for roughly 65% of the total sales.
Chairman and CEO Scott Thompson expressed enthusiasm for the acquisition, highlighting the long-standing relationship with Mattress Firm and the potential for improved innovation and customer experience. He also acknowledged the contributions of employees, suppliers, legal and financial advisors, and shareholders, particularly noting the 80% increase in stock price since the announcement of the transaction. The stock’s strong momentum is reflected in InvestingPro data, showing a 34% return over the past six months and trading near its 52-week high of $68.53. While current analysis suggests the stock may be overvalued, InvestingPro subscribers have access to 8 additional ProTips and comprehensive valuation metrics for informed decision-making.
In line with the corporate expansion, Peter Sachse, with substantial executive leadership experience in retail, joins the Board of Directors, bringing his expertise to support the company’s growth trajectory.
The company also plans to divest 73 Mattress Firm retail locations and its Sleep Outfitters subsidiary to Mattress Warehouse in the second quarter of 2025.
Shares of Somnigroup International Inc. will trade on the NYSE under the ticker symbol "SGI" following the name change. Tempur Sealy will discuss further details on a business update call on Thursday, February 6, 2025, and will address fourth-quarter and full-year 2024 financial results on February 20, 2025. With current trailing twelve-month revenue of $4.89 billion and a P/E ratio of 28.68, investors can access detailed earnings forecasts and valuation metrics through InvestingPro’s comprehensive research reports, available for over 1,400 US stocks.
This news article is based on a press release statement from Tempur Sealy International, Inc.
In other recent news, bedding giant Tempur Sealy International is set to finalize its acquisition of Mattress Firm Group Inc., following a U.S. District Court ruling. This development is expected to deliver significant benefits to stakeholders, according to Tempur Sealy’s Chairman and CEO, Scott Thompson. In the wake of this news, several analyst firms have adjusted their outlooks on Tempur Sealy. UBS analyst Atul (NSE:ATLP) Maheswar raised the price target for the company’s shares to $78, maintaining a Buy rating. Truist Securities also increased its price target to $72, citing potential financial benefits from the Mattress Firm deal. KeyBanc Capital Markets and Piper Sandler followed suit, raising their price targets to $70 and $76 respectively, with both firms maintaining an Overweight rating. These recent developments underscore the growing optimism surrounding Tempur Sealy’s strategic moves and future earnings potential.
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