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Leggett & Platt acquires Tempur's innerspring unit in US
01
Jul '14
Tempur Sealy International, Inc., the world's largest bedding provider, announced its decision to exit production of innerspring components in the U.S. In conjunction with this announcement, Tempur Sealy and Leggett & Platt, the leading global producer of bedding components, jointly announced that Leggett & Platt has acquired Tempur Sealy's three U.S. innerspring component production facilities and equipment, along with associated working capital for a total consideration of approximately $48 million, subject to customary working capital adjustments. Other financial terms were not disclosed. 
 
In addition, the two companies have expanded and extended their supply relationship whereby Leggett & Platt will become the exclusive long-term supplier in the U.S. and Canada of wire-based innersprings for Tempur Sealy, and of boxsprings for Sealy.
 
The transaction creates significant benefits as it leverages the strengths of two key players of the global bedding industry. Importantly, the agreement paves the way for multi-year strategic product development initiatives between the two companies.
 
Tempur Sealy International, Inc. CEO Mark Sarvary commented, "Our decision to exit the production of innerspring components in the U.S. will allow us to focus our investments on brand building and product innovation while improving our working capital position. Leggett & Platt is a well-established leader in the industry and our expanded relationship will provide significantly greater flexibility for our product development efforts."
 
Leggett & Platt Board Chair and CEO David S. Haffner commented, "We are very pleased to become a long-term provider of components to Tempur Sealy, and we look forward to the expanded strategic partnership. The additional production should enhance economies of scale, benefit from our vertical integration in steel rod and wire, and allow manufacturing optimization across a broad asset base. We expect this agreement to add approximately 2% to sales, and be neutral to EPS over the first year as we execute the integration plan." 

Tempur Sealy

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