Foam mattress-maker Tempur-Pedic International, Inc. said Thursday it has agreed to buy its smaller rival, Sealy Corporation, in a deal worth $1.3 billion including debt.
Lexington, Kentuckybased Tempur-Pedic will pay $2.20 in cash for each Sealy share, a total of about $228.6 million. The purchase price represents a premium of 2.8 percent over Sealy’s Wednesday closing share price. The deal is expected to close during the first half of 2013, pending regulatory approval.
By acquiring its Trinity, North Carolinabased rival, Tempur-Pedic bolsters its product offerings with brands that include Sealy, Sealy Posturepedic, and Stearns & Foster. Sealy operates 25 plants in North America and reported $1.2 billion in sales during the 2011 fiscal year.
The deal comes less than two months after private equity firm Advent International paid $3 billion for a majority stake in AOT Bedding Super Holdings, the parent company of mattress-makers Serta and Simmons.
Bingham McCutchen is advising Tempur-Pedic on the purchase with a team led by corporate cochair John Utzschneider. Bingham’s team also includes antitrust partners William Berkowitz and Brandon Bigelow; intellectual property partner Scott Bluni; M&A partner Benjamin Burkhart; real estate partner James Black, Jr.; tax partner Anthony Carbone; finance partner Amy Kyle; labor and employment partner Louis Rodriques; and environmental partner Michael Wigmore. M&A partners Christina Melendi, Amy Mugherini, and Carl Valenstein also advised, along with benefits and compensation partners Natascha George and Russell Isaia. Other Bingham attorneys on the matter include banking of counsel Anastasia Caviris; corporate governance of counsel Rebecca Hartley; M&A counsel Gitte Blanchet; tax counsel Thomas Gray; and benefits and compensation counsel Rachel Faye Smith.
Last year, Berkowitz and Bigelow led a Bingham antitrust team that won a dismissal in New York Supreme Court of a challenge by the New York Attorney General’s office regarding Tempur-Pedic’s practice of not selling products to retailers who sell them for prices below the company’s suggested retail price. (As it happens, as The Am Law Daily has reported, Bingham announced earlier this month to much fanfare that it will move 250 back-office jobs to Tempur-Pedic’s hometown next spring.)
Former Thompson & Knight partner Lou Jones is Tempur-Pedic’s general counsel.
Sealy, meanwhile, has enlisted a Simpson, Thacher & Bartlett team led by M&A partner Sean Rodgers. Also advising are credit partner James Cross; capital markets partner Joseph Kaufman; compensation and benefits partner Andrea Wahlquist; tax partner Nancy Mehlman; and antitrust partner Joseph Tringali.
The firm represented Sealy on its 2006 initial public offering and, in June, worked on a Sealy joint venture with foam mattress company Comfort Revolution.
Blank Rome M&A partners Barry Genkin and Alan Lieblich advised an independent committee of Sealy’s board of directors. Michael Murray serves as general counsel for Sealy.
