AUTHORIZED DEALER OF OVER 50 DIFFERENT ELECTRIC HOMECARE PRODUCTS MANUFACTURERS Never Undersold - Always the Lowest Price on Pocketed Coil Mattress @ the Lowest Price Legget and Platt Pocketed Coil MattressNews that a family-owned South African company has agreed to acquire the biggest specialty mattress retailer in the U.S. shocked some analysts with the deal’s size and cost. Steinhoff International Holdings NV a furniture seller based near Cape Town, announced Sunday that it was buying Houston, Texas-based Mattress Firm Holding Corp. the owner of Sleepy’s, in a $2.4 billion deal that carries a stunning 115% premium. “To say we were surprised by this news would be an understatement,” Stifel analysts summed up their reaction in a Monday note. Steinhoff is paying $64 a share in cash, compared with Mattress Firm’s Friday close of $29.74, in a deal that gives the company its first foothold in the U.S. market. In addition to mattresses, Steinhoff sells a range of household items, sometimes earning it the nickname “Africa’s Ikea.”
Last month, it acquired British retailer Poundland Group PLC, which like U.S. “dollar stores,” sells goods worth a pound ($1.30). Steinhoff had $11 billion in annual sales in calendar year 2015, according to FactSet. It makes more than half its sales in Europe — especially in France and the U.K. — where it is both a manufacturer and a retailer. Steinhoff’s latest deal will create “the world’s largest multi-brand mattress retail distribution network,” the company said in its release. Mattress Firm lists 3,500 stores in 48 states that sell a range of products including Sealy and Tempur-Pedic lines. The company has itself grown through acquisitions, and just closed on its purchase of the Sleepy’s chain in February. But while that deal boosted sales, it increased the company’s costs. It also racked up costs with the rebranding of all outlets under the Mattress Firm name. In June, the retailer issued a profit warning for the full year as it booked a $139 million charge tied to the rebranding.
The sting pushed it to a loss for its fiscal first quarter. It is now expecting a full-year loss of $1.57 to $1.62 a share, after a profit of $1.82 a share in the year-earlier comparable quarter. “Mattress Firm was not exactly hitting on all cylinders in recent quarters,” said Stifel analysts. The earnings warning prompted a sharp spike in short selling, as investors bet the stock would fall. Short interest in Mattress Firm’s stock through mid July was up 31% from the end of 2015 to 6.8 million shares, according to FactSet, just below the record of 7.2 million shares reached at the beginning of July. The stock had fallen 33% on the year through Friday, before popping a staggering 114% on Monday to trade near $63.70 in afternoon action. While analysts were surprised at the high price Steinhoff is paying for a company with a less-than-stellar outlook, they believe it will succeed in closing the deal. “We don’t see another offer coming from domestic players given that MFRM is the largest retailer and no manufacturers are looking to forward integrate,” analysts at SunTrust Robinson Humphrey wrote in a note.
That leaves private-equity firms, several of which are already owners of the stock, or other international retailers as potential suitors.”We view the potential number of other bidders as very limited and would not operate on the view another bid is coming,” the analysts wrote. Wedbush analysts agreed the price is rich, especially given Mattress Firm’s struggles and a challenging traffic environment for brick-and-mortar mattress retailers. Mattress companies are also feeling the threat from the fast-growing bed-in-a-box competition from startup Casper, among others. Don’t miss: Casper mattresses go mobile amid plans to expand At 11.2 times trailing 12-month (TTM) pro forma EBITDA (earnings before interest, taxes, depreciation and amortization) and 0.9 times TTM pro forma net sales, the price is high even for a strategic acquirer like Steihnoff, they said. However, when compared with other recent deals, it appears more reasonable. Mattress Firm paid 10.9 times TTM EBITDA and 0.7 times TTM net sales for Sleepy’s, but it paid 13.7 times TTM EBITDA and 1.3 times net sales for Sleep Train, a deal that closed in September of 2014.
“Other comparable transactions include [the] Tempur-Sealy acquisition at 9.6x TTM EBITDA and 1.1x net sales in 2012, and Advent International’s Serta-Simmons transaction at 10.8x TTM EBITDA and 1.3x net sales in 2012,” said Wedbush. Even with sticker shock, the weekend news prompted speculation that rival Select Comfort Corp. might also be of interest to an international buyer, said SunTrust analysts. Select Comfort “is dominant in its niche of high-end adjustable beds and has an unparalleled store experience,” they wrote, while conceding the list of buyers is likely limited for it, too. In reaction, Select Comfort shares rallied some 6% before pulling back to trade up about 4% Monday afternoon even as the S&P 500Tempur Sealy International Inc. sharesSteinhoff shares were last up 1.7%.The Best Mattress for a Better Night's Sleep Buying a new mattress? Here are tips for finding the right mattress for you. You spend about a third of every day in bed. Whether that time is spent blissfully slumbering -- or tossing and turning -- depends a lot on your mattress.
"A mattress can impact a person's sleep," says Michael Decker, PhD, RN, associate professor at Georgia State University and spokesman for the American Academy of Sleep Medicine. One way that your mattress affects your sleep has to do with the network of fine blood vessels, called capillaries, that runs underneath your skin. "When you lie on any part of your body for an extended period of time, the weight of it reduces the flow of blood through those blood vessels, which deprives the skin of oxygen and nutrients," Decker says. This causes nerve cells and pain sensors in your skin to send a message to your brain for you to roll over. Rolling over restores blood flow to the area, but it also briefly interrupts your sleep. Ideally, a mattress that reduces the pressure points on your body should give you a better night's sleep, Decker says. Yet the ideal mattress is different for each person. Which Mattress Is Right for You? Finding the right mattress isn't about searching out the highest-tech brand or spending the most money.
"A much more expensive mattress doesn't necessarily mean it's better," Decker says. A high price tag is a product of both the materials that go into the mattress, and the marketing that helps sell it. Instead of focusing on price and brand name, think about what you want in a mattress. "Selecting a mattress is very personal," Decker says. Some people prefer a firmer mattress; others favor a softer style. Although there isn't a lot of scientific evidence to prove that one type of mattress will help you sleep better than another, people with certain medical conditions do seem to rest easier on a particular mattress style. Anyone with back or neck pain should take a Goldilocks approach to mattress buying: not too hard, and not too soft. "If you're on too soft [of] a mattress, you'll start to sink down to the bottom. But on too hard of a mattress you have too much pressure on the sacrum, and on the shoulders, and on the back of the head," says Howard Levy, MD, an Emory University assistant professor of orthopaedics, physical medicine, and rehabilitation.
A medium-firm mattress, or a firm mattress with a softer pillow top, will give your spine that "just-right" balance of support and cushioning. An adjustable bed can be a good buy if you need to sleep with your head raised. Doctors sometimes recommend elevating the head to help people with COPD breathe easier, or to prevent nighttime heartburn from GERD. These beds can also allow you to adjust your knees and hips to a 90-degree angle, relieving some of the pressure on sore joints, Levy says. If you have allergies or asthma, you might have considered buying a bed labeled "hypoallergenic." "There are a lot of claims made by mattress manufacturers that their mattresses are hypoallergenic or don't support the growth of dust mites, but I don't know of scientific evidence to support these claims," says Paul V. Williams, MD, a pediatrics professor at the University of Washington School of Medicine and an allergist at Northwest Allergy and Asthma Center in Washington state. Williams says dust mites will live anywhere there's food -- and that food is your dead skin cells.
Instead of investing in an allergy-free mattress, slip on a washable mattress encasing. It will form a barrier that prevents dust mites from getting to you. A mattress encasing cuts allergen growth by robbing dust mites of their food supply, Williams says. And what about those space-age memory foam mattresses, which can cost thousands of dollars? There is some evidence they can help with back problems and improve sleep, but their advantage over a regular coil mattress is only slight. Where memory foam mattresses can really help you sleep is if you have an active bed partner who is keeping you awake, Decker says. Foam mattresses reduce motion transfer, letting you lie still while your partner tosses and turns. Test Drive a Mattress Before You Buy "You wouldn't buy a car without test driving it," Decker says. So why would you invest hundreds -- or even thousands of dollars in a mattress without trying it out first? Take any new mattress you're considering for a test nap.
"People should not be embarrassed to go into a store and lay on a mattress for 20 minutes," Decker says. For a more realistic test, sleep in the beds at different hotel chains when you travel. If you get an especially good night's sleep on one of them, ask the desk clerk what brand it is. When you test out a mattress, make sure it feels comfortable in every position, especially the side you favor for sleeping. The mattress should be supportive where you need it, without putting too much pressure on your body, Levy says. Time for a New Mattress If you've been having trouble sleeping, the problem might not be your mattress type, but its age. "It's really important for people to realize that mattresses have a certain lifespan," Decker says. Keep your mattress too long, and the foam and other materials inside it will start to break down, compromising its ability to support your body. Decker recommends keeping your mattress for no more than 10 years. After that, it's time to go mattress shopping again.