The Mattress Firm Holding Corporation, one of the country’s big sellers of Sealy and Serta mattresses, has agreed to acquire a West Coast rival, the Sleep Train chain, for about $425 million, solidifying its position as the biggest mattress retailer in the country.
The deal will create a larger competitor to face off against department stores and online powerhouses like Amazon, but the combined company plans to continue to operate both brands.
Sleep Train operates about 310 stores, mostly in California, Oregon and other Western states. The company, which is private, had revenue of $471 million last year.
This will add to Mattress Firm’s holdings, which include more than 1,500 stores across 36 states. At the combined company, pro forma revenue is expected to approach $2 billion a year.
“The acquisition of Sleep Train will establish Mattress Firm as the first border to border, coast to coast multibrand mattress specialty retailer in the United States,” R. Stephen Stagner, Mattress Firm’s chief executive, said in a statement.
Sleep Train’s chief executive, Dale Carlsen, and chief financial officer, Rob Killgore, will continue in new roles at the combined company.
“Since 1985, Sleep Train has provided our customers with a good night’s sleep and been a strong partner in our communities,” Mr. Carlsen said in a statement.
In 2010, Sleep Train introduced an employee stock ownership plan, allowing the company’s workers to obtain equity in the company. The trustee of the plan, along with the Sleep Train board, approved the sale to Mattress Firm.
“Today’s announcement represents the hard work of the Sleep Train employee owners who now together with their Mattress Firm peers will move to transform the bedding retail industry,” Mr. Carlsen said.
Barclays advised Mattress Firm and Norton Rose Fulbright provided legal advice. Prairie Capital Advisors provided a fairness opinion to the trustee of the Sleep Train employee stock ownership plan, and Shartsis Friese provided Sleep Train with legal advice.