Dive Transient:
- Tempur Sealy and Mattress Agency Group are looking for an injunction in federal court docket for the Southern District of Texas to cease Federal Commerce Fee administrative proceedings that search to dam the mattress maker’s acquisition of retailer Mattress Agency.
- The mattress producer’s criticism, filed Friday, asks a choose to rule {that a} federal court docket, not an FTC administrative continuing, is the right venue to determine the case.
- Additionally Friday, Tempur Sealy mentioned it has secured a brand new $1.6 billion time period mortgage. The corporate plans to make use of the proceeds from the latest mortgage together with different debt proceeds and money to fund the acquisition of Mattress Agency.
Dive Perception:
Tempur Sealy’s resolution to sue the FTC over the company’s problem to its acquisition of Mattress Agency is the most recent flip in a case that started final summer time, when the mattress maker introduced it had reached a $4 billion deal to accumulate Mattress Agency.
The FTC’s federal court docket case towards Tempur Sealy is scheduled to start on Nov. 12 with an evidentiary listening to earlier than Decide Charles Eskridge in Houston that’s anticipated to final two weeks, in line with court docket docket data. On the coronary heart of the matter is Tempur Sealy’s declare {that a} federal court docket — not an company administrative listening to — is the right venue to resolve the FTC’s claims concerning the acquisition.
In difficult the deal, the FTC mentioned in a July assertion if the transfer goes via that Tempur Sealy would “have the flexibility and incentive to suppress competitors and lift costs for mattresses for thousands and thousands of shoppers as soon as it acquires Mattress Agency.” The mixed firm would have “huge energy and a number of elements of the mattress provide chain.”
As a part of its engagement with the FTC, Tempur Sealy mentioned in September that it had reached an settlement to promote 73 Mattress Agency places, it’s 103 location Sleep Outfitters subsidiary and 7 distribution facilities to rival retailer Mattress Warehouse. The rival retailer is way smaller, with about 300 places. If this deal goes via, Tempur Sealy would function over 2,800 retail shops worldwide, with Mattress Agency producing half of its North American gross sales.
In its court docket submitting, Tempur Sealy notes that the FTC’s administrative continuing begins earlier than an FTC administrative regulation choose “and ends with the identical 5 Commissioners who voted to problem Plaintiff’s merger within the first place.” With that construction in place, “unsurprisingly, the FTC nearly all the time wins,” the corporate mentioned in its 20 web page lawsuit, which additionally famous that the company has received each administrative continuing they’ve introduced earlier than themselves for the final 25 years.
“The bedding trade is very aggressive, together with hundreds of brick-and-mortar storefronts and an unlimited on-line market,” Tempur Sealy CEO Scott Thompson mentioned in a press release. “The mix of Tempur Sealy and Mattress Agency will ship incremental advantages to shoppers and alternatives for workers, from enhanced product innovation to an improved buyer shopping for expertise and strengthening the whole monetary place for the corporate.” For the quarter ended July 29, Mattress Agency reported income of $982 million, which was almost flat yr over yr. Mattress Warehouse is privately held.
Tempur Sealy’s model portfolio contains Tempur-Pedic, Sealy and Stearns & Foster. The corporate additionally has non-branded value-focused personal label and OEM merchandise. The corporate sells merchandise via third-party retailers, e-commerce and a worldwide footprint of over 750 company-owned shops. Mattress Agency has a bodily retailer footprint of over 2,300 places.