Strategies and Synergies of Tempur-Pedic International's plan to acquire Sealy Corp

Strategies and Synergies of Tempur-Pedic International
Case Study
Finance & Accounting
Pages 3 (753 words)
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Overview, history and shareholders
Tempur-Pedic International is a global firm that produces, markets, and distributes first-class mattresses and pillows. Its sister company, Sealy Corporation, manufacturers bedding in a global scale.


These two companies had agreed to merge and create $2.7 billion international bedding provision. This agreement entails an acquisition of $242 million and assumption of $750 million in debt by Tempur-Pedic International from Seal Corp. Apparently, Seal Corp had raised its shares up by 9 per cent in anticipation of the acquisition by the rival firm. The shares traded at $2.33. Tempur-Pedic felt threatened by the rapid up scaling of the Sealy Corp and was determined to recapture the market share. Under the agreement, Sealy Corp would continue with its independent operations under its Chief Executive Officer, Larry Rogers. He will report to the Tempur-Pedic’s Chief Executive Officer, Mark Sarvey.
Although Tempur-Pedic Corp and Sealy Corp are both bedding companies, they each took separate paths over the past twenty years. Tempur-Pedic that was founded 1992 and later emerged as the biggest manufacturer of mattresses in 2011. Consequently, its sales revenue rose by 28 per cent attaining a $ 1.42 billion point. Sealy Corp has been operating for 131 years but the rise in Tempur-Pedic resulted in the plunging of its shares by more than ninety per cent in 2006. Consequently, its sales revenue was reduced to $1.23 billion during the 2011 public initial offer (Arora & Mukherjee, 2012).
Sealy Corp had H Partners Management LLC as its number one shareholder. ...
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