"This transformational acquisition unites the nation's two largest mattress specialty retailers, providing customers with convenience, value and choice through our truly border-to-border and coast-to-coast, multi-brand retail stores and distribution network," said Steve Stagner, Mattress Firm's CEO.
In a Monday evening conference call with securities analysts, Stagner
said there is "unquestionably compelling strategic rationale" for the acquisition, which will allow Mattress Firm
to leverage costs such as advertising, product sourcing and procurement on a national basis, and continue its long term drive to operate 4,500 stores nationally.
"We have long admired Sleepy's
and the strong business they have built," Stagner
"We have felt for years that this combination needed to happen."
would be operated essentially "as is" during 2016.
doesn't anticipate a significant number of store closings because the two retailers compete head-to-head in only a few markets - Chicago being the most noteworthy.
"We typically don't try to close a lot of stores (following an acquisition).
We tend to ride out the leases," he
"We might have some overlap for a few years, at most."
said the acquisition should result in some $40 million in cost savings by the third year after the closing.
In addition, the company expects to get income tax benefits of about $11 million annually for at least a decade from the goodwill generated from the transaction and the carryover tax basis of other assets.
told analysts the company had discussed an acquisition with Sleepy's officials "several times over the years," but talks began in earnest in late September.
At the time, other parties who he
wouldn't identify also had expressed interest in buying Sleepy's
"This represents our ninth consecutive quarter of positive same store sales growth," said Stagner