The owner of retailer Mattress Firm has made a roughly $1.6 billion offer to acquire Leggett & Platt, the 142-year-old manufacturer that was the first company to patent spiral coil bedsprings, which would create a bedding behemoth.
Dallas-based Somnigroup International on Monday said it had made an unsolicited offer to purchase all Leggett & Platt’s shares in an all-stock deal. Under the terms of the deal, shareholders of Carthage, Missouri-based Leggett & Platt would receive $12 a share, reflecting a 30.3% premium to the firm’s average closing price for the past 30 trading days.
The transaction would be subject to regulatory approvals.
“We believe that a combination of Leggett & Platt with Somnigroup would be uniquely compelling for both companies and all of our collective stakeholders,” Scott Thompson, Somnigroup chairman and CEO, said in a letter to Leggett & Platt’s board. “Joining Leggett & Platt with a leading bedding manufacturer and bedding retailer would unquestionably foster significant strategic advantages and efficiencies for the combined company.”
He added that Leggett & Platt has been an important supplier to Somnigroup for many years.
Somnigroup was formed in the wake of Tempur Sealy International’s acquisition of Houston-based Mattress Firm, which was announced in May 2023. Somnigroup bills itself as the world’s largest bedding company, with a portfolio of properties and brands that includes not only Mattress Firm but also Tempur Sealy, Dreams, Stearns & Foster and Sleepy’s.
Leggett & Platt supplies bedding components and private label finished goods; automotive seat comfort systems; home and work furniture components; flooring underlayment; and hydraulic cylinders for material handling and heavy construction.
When Tempur Sealy said it was acquiring Mattress Firm, the combined company would have had roughly 3,000 stores globally. But in September last year, Tempur Sealy said it was divesting some properties to address antitrust concerns relating to its Mattress Firm acquisition. It agreed to sell 176 Mattress Firm and Sleep Outfitters stores and seven distribution centers to Mattress Warehouse.
Somnigroup didn’t respond to a call from CoStar News to confirm the current number of Mattress Firm stores, but according to CoStar data, there are 2,480 retail locations.
Leggett & Platt has a large portfolio of industrial properties, about 124, according to CoStar data. In September, it announced it was closing an adjustable-bed factory at 108 Summer Court in Georgetown, Kentucky, according to local media reports. About 100 workers at that site will be laid off in the first quarter next year. The company cited “difficult business conditions” for the shutdown.
Leggett & Platt owns that 250,000-square-foot Kentucky plant, according to CoStar data. The company didn’t respond to an email from CoStar News asking about its plans for the property.
Somnigroup said Leggett & Platt would continue to operate independently under its umbrella and would likely retain a significant presence in Carthage. The would-be acquirer also said it expects to retain most of Leggett & Platt’s management team and employees.
“Like Mattress Firm, Tempur Sealy and Dreams, Leggett & Platt’s leadership team would enjoy significant autonomy,” Thompson said in his letter.
Leggett & Platt on Monday confirmed that it had received Somnigroup’s unsolicited proposal and that it would review and evaluate it. Somnigroup asked for a response by Dec. 22.
Sealy’s initial purchase price for Mattress Firm rose to $5 billion from $4 billion when the sale closed in February.
In May, Somnigroup announced it was opening a headquarters in Dallas for corporate staff but keeping Tempur Sealy’s headquarters in Lexington, Kentucky, and Mattress Firm’s headquarters in Houston.
For the record
Somnigroup International’s financial adviser is Goldman Sachs & Co., and its legal adviser is Cleary Gottlieb Steen & Hamilton. J.P. Morgan Securities is serving as financial adviser to Leggett & Platt, and Latham & Watkins is serving as its legal adviser.