Mattress Firm Holding Corp (NASDAQ:MFRM) stock surged on Monday following news that it will be acquired by German furniture retailer Steinhoff.
The deal will have Mattress Firm being acquired for $64 per share in cash. This is a 115% premium over the $29.74 closing price for the company’s stock on Friday, August 5, 2016. This has the total equity value of the deal sitting at $2.4 billion. The acquisition is valued at $3.8 billion with net debt.
If the deal succeeds, Mattress Firm will operate as a subsidiary of Steinhoff. The company will continue to operate out of its current headquarters located in Houston, Texas. It will also retain Steve Stagner as its Executive Chairman and Chairman of the Board, and Ken Murphy as its President and CEO. Stagner will also become a member of Steinhoff’s executive committee.
“This transaction will allow Steinhoff to not only enter the U.S. market with an industry leading partner and a national supply chain, but it will also expand Steinhoff’s global market reach in the core product category of mattresses,” Markus Jooste, CEO of Steinhoff, said in a statement.
If regulators approve the deal, it will result in the creation of the largest multi-brand mattress retail distribution network in the world. The companies are currently expecting to deal to be completed sometime during the third quarter of 2016.
Barclays acted as a financial advisor to Mattress Firm and Ropes & Gray LLP provided the company with legal advice concerning the deal. Steinhoff had legal advice for the acquisition given to it by Linklaters LLP.
MFRM stock was up by 114% as of Monday morning.
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