Boston, MA 09/05/2014 (wallstreetpr) – Mattress Firm Holding Corp (NASDAQ:MFRM) agreed to purchase Sleep Train in a deal that is expected to solidify its position in the mattress business. The company said top executives of Sleep Train will be offered new positions in the combined company. Revenue at the combined company is expected to increase significantly. The acquisition is also expected to help the company deal with the increasing retail competition.
Mattress Firm is already one of the biggest sellers of mattresses in the country, and the company is not worried about getting bigger. That is why it has offered about $425 million to purchase rival Sleep Train in a deal that is likely to create the biggest mattress retailer in the U.S. The deal is also expected to help the company boost its competitiveness against rivals such as Amazon.com Inc. (NASDAQ:AMZN).
$2 billion annual revenue in focus
The acquisition of Sleep Train will add 310 more stores to Mattress Firm Holding Corp (NASDAQ:MFRM), which already boasts more than 1,500 stores in 36 states. Sleep Train’s bigger presence is in Oregon, California and a number of Western states. The company generated revenue of $471 million last year. The combined company is expected to have pro forma revenue in the region of $2 billion annually. Sleep Train’s CEO, Dale Carlsen and CFO, Rob Killgore, will take new positions at the combined company.
With the acquisition of Sleep Train, Mattress Firm Holding Corp (NASDAQ:MFRM)’s CEO, R. Stephen Stagner, expects the company to become the first specialty retailer in the U.S. with border to border and coast to coast presence.
2Q revenue up
Mattress Firm Holding Corp (NASDAQ:MFRM) recently released its 2Q2014 results in which net sales increased 35.5% to $410 million. The company quit the quarter with GAAP earnings per share of $0.41. It said comparable-store sales jumped up 9.7% in the quarter and new and acquired stores brought in incremental sales.