Acquisition brings mattress giant into private label bedding
One of the biggest names in mattresses is getting in on the private label game. Tempur Sealy International has acquired a majority stake in a new LLC that will own substantially all the assets of private label bedding maker Sherwood Bedding.
Sherwood Bedding, one of the United States’ top 10 bedding producers, operates four manufacturing facilities and had estimated annual wholesale revenues of roughly $150 million. The deal will see Tempur Sealy paying $40 million for an 80% stake in Sherwood Bedding, with bedding manufacturer the Ellman family maintaining a 20% stake. Sherwood Bedding will operate as a standalone business unit within Tempur Sealy, led by its current leadership team.
"Over the past nine years, Sherwood Bedding has grown to become one of the most respected bedding producers in the industry,” said Tempur Sealy chairman and CEO Scott Thompson. “Sherwood Bedding's flexible and efficient operating model, focused primarily on value and high-velocity price points, complements Tempur Sealy's iconic brands, powerful distribution model, and supply chain. Together, we believe that we can build upon existing relationships to deliver more compelling products, branded and non-branded, than either business could on its own.”
Tempur Sealy said its foray into private label through this acquisition will focus on creating a suite of products that includes Sherwood’s unbranded products and the Lexington, Ky.-based company’s well-known brands — Tempur-Pedic, Sealy and Stearns & Foster.
"With Tempur Sealy being the dominant player in the U.S. bedding industry, we believe we have the perfect partner to acquire market share in the private label sector,” said Sherwood Bedding co-president Neil Ellman. “The complementary knowledge and market-fit of the companies as well as the ability to improve upon our low-cost structure delivers a unique opportunity and provides us with a sustainable competitive advantage."
The transaction is expected to close by Q1 of 2020.