Mattress Firm Holding Corp. (“Mattress Firm” or the "Company")
(NASDAQ: MFRM), the nation's largest mattress retailer, today
announced that the Company and Steinhoff International Holdings
N.V. (“Steinhoff”) (FRANKFURT: SNH) have entered into a definitive
merger agreement under which Steinhoff will, subject to the
successful consummation of a cash tender offer and satisfaction of
other customary closing conditions, acquire Mattress Firm for
$64.00 per share in cash, which represents a premium of 115% over
the Company’s closing stock price of $29.74 on Friday, August 5,
2016. This represents a total equity value of approximately $2.4
billion and an enterprise value of approximately $3.8 billion,
including net debt. The merger agreement, which has been
unanimously approved by the Mattress Firm board of directors and
the management and supervisory boards of Steinhoff, will create the
world’s largest multi-brand mattress retail distribution
network.
Pursuant to the terms of the merger agreement, a wholly owned
subsidiary of Steinhoff will commence a tender offer to purchase
the outstanding shares of Mattress Firm common stock at a price of
$64.00 per share in cash. The acquisition is expected to close by
or around the end of the third calendar quarter, subject to
regulatory approvals, and satisfaction of a majority tender
condition and other customary closing conditions. The transaction
is not subject to any financing condition.
At the close of the transaction, Mattress Firm will operate as a
subsidiary of Steinhoff from Mattress Firm’s current headquarters
in Houston, Texas. Both Steve Stagner, executive chairman and
chairman of the board of Mattress Firm, and Ken Murphy, president
and CEO of Mattress Firm, will remain in their positions with Mr.
Stagner also joining Steinhoff’s executive committee.
“The Mattress Firm board believes that the transaction provides
significant value to our stockholders through the premium to our
share price and the immediate liquidity at closing, while giving
Mattress Firm an ideal partner with a proven track record in the
complete mattress supply chain including the retail and manufacture
of mattresses,” said Mr. Stagner. “This expertise will complement
our diverse selection of products provided by our valuable
partners. Steinhoff’s management team shares our vision for the
growth and expansion of Mattress Firm and, as such, we believe they
are the right long-term partner for our customers, employees,
suppliers and other stakeholders.”
“Today’s announcement marks an exciting new chapter for Mattress
Firm that will open up future opportunities for our employees, our
customers and our business partners,” said Mr. Murphy. “We remain
focused on our long-term strategy to build a national chain under
one banner in the U.S. and we will continue activating and
unlocking the true power of all of the assets we have assembled to
truly become the preferred choice for better sleep.”
Steinhoff is an integrated retailer that manufactures, sources
and sells furniture, household goods and clothing in Europe, Africa
and Australasia. They operate more than 40 brands in 30 countries.
Steinhoff has a primary listing on the Frankfurt Stock Exchange and
a secondary listing on the Johannesburg Stock Exchange.
“The boards of Steinhoff and its management team are
enthusiastic about the opportunities this transaction creates,”
said Markus Jooste, CEO of Steinhoff. “This transaction will allow
Steinhoff to not only enter the U.S. market with an industry
leading partner and a national supply chain, but it will also
expand Steinhoff’s global market reach in the core product category
of mattresses. The Mattress Firm brand and speciality retail
concept are a strong complement to the Steinhoff group retail brand
portfolio in the many geographies where the group operates.
“Steinhoff recognizes the strength of Mattress Firm’s
experienced and entrepreneurial management team and its proven
track record of delivering growth, profitability and leadership in
the U.S. retail mattress market. We look forward to welcoming
Mattress Firm employees to be part of the one of the world’s
leading multi-format retailers.”
Strategic Rationale
- Mattress Firm is the leading mattress
retailer in the fragmented U.S. household goods market
- More than 3,500 stores in 48 states
with 2015 pro forma sales of $3.5 billion
- Best-in-class distribution network with
75 distribution centers across the U.S.
- Creates the world’s largest multi-brand
mattress retail distribution network
- Experienced Mattress Firm management
team with a proven track record of integrating acquisitions in the
U.S. market
- Strong recurring free cash flow and low
maintenance capex needs
- Enhances Steinhoff's free cash flow
generation over time
- Leverages Steinhoff’s global sourcing
capabilities with additional economies of scale
- Attractive U.S. market with high
disposable consumer income
- Further diversification of Steinhoff’s
European and African operations
Advisors
Barclays acted as exclusive financial advisor to Mattress Firm
and provided a fairness opinion to the Company. Ropes & Gray
LLP acted as legal counsel to Mattress Firm in connection with the
transaction. Linklaters LLP acted as legal counsel to Steinhoff in
connection with the transaction.
Forward-looking Statements
This press release contains forward-looking statements regarding
Mattress Firm, including, but not limited to, statements related to
the anticipated consummation of the tender offer by Steinhoff for
Mattress Firm common stock and the timing and benefits thereof, and
estimated future financial results, regulatory submissions and
performance of Mattress Firm’s business in mattresses and related
products and accessories, as well as other statements that are not
historical facts. These forward-looking statements are based on the
Company’s current expectations and inherently involve significant
risks and uncertainties. Actual results and the timing of events
could differ materially from those anticipated in such
forward-looking statements as a result of these risks and
uncertainties, which include, without limitation, risks related to
Steinhoff’s ability to complete the transaction on the proposed
terms and schedule, including risks and uncertainties related to
the satisfaction of closing conditions such as, without limitation,
Mattress Firm stockholders not tendering shares in the tender
offer; the possibility that competing offers will be made; that a
material adverse effect occurs with respect to Mattress Firm;
disruption from the proposed acquisition, making it more difficult
to conduct business as usual or maintain relationships with
customers, employees or suppliers; the outcome of legal proceedings
that may be instituted against Mattress Firm and/or others related
to the proposed transaction and those other risks detailed under
the caption “Risk Factors” and elsewhere in Mattress Firm’s U.S.
Securities and Exchange Commission (“SEC”) filings and reports,
including in Mattress Firm’s Quarterly Report on Form 10-Q for the
quarter ended May 3, 2016 and Annual Report on Form 10-K for the
year ended February 2, 2016, which are filed with the SEC. Mattress
Firm cautions investors not to place considerable reliance on the
forward-looking statements contained in this communication.
Mattress Firm undertakes no duty or obligation to update any
forward-looking statements contained in this press release as a
result of new information, future events or changes in its
expectations.
Additional Information Regarding the Transaction and Where to
Find It
The tender offer described here, which has not yet commenced,
will be made for the common stock, par value $0.01 per share, of
Mattress Firm. This announcement is not a recommendation, an offer
to purchase or a solicitation of an offer to sell shares of
Mattress Firm stock. Neither Steinhoff nor any of its wholly owned
subsidiaries has commenced the above-referenced tender offer. Upon
commencement of the tender offer, Steinhoff, Stripes US Holding,
Inc. and Stripes Acquisition Corp. will file with the SEC a Tender
Offer Statement on Schedule TO. Following commencement of the
tender offer, Mattress Firm will file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9.
Stockholders are urged to read the Tender Offer Statement Offer
(including the offer to purchase, a related letter of transmittal
and other offer documents) and the Solicitation/Recommendation
Statement on Schedule 14D-9 when such documents become available,
as they will contain important information, including the terms and
conditions of the tender offer. Stockholders can obtain these
documents when they are filed and become available free of charge
from the SEC’s website at http://www.sec.gov, or from Mattress Firm
upon written request to Secretary, Mattress Firm Holding Corp.,
5815 Gulf Freeway, Houston, Texas 77023, telephone number (713)
923-1090 or from Mattress Firm’s website,
http://ir.mattressfirm.com. Such materials filed by Steinhoff will
also be available for free at Steinhoff’s website,
http://www.steinhoff.com.
About Steinhoff International Holdings N.V.
Steinhoff International Holdings N.V. (“Steinhoff”) is a leading
retailer that manufactures, sources and retails furniture,
household goods and clothing in Europe, Africa and Australasia.
Retail operations are positioned towards value conscious consumer
segments, providing them with affordable products through a
vertically integrated supply chain. Steinhoff operates more than 40
brands through 6,500 stores. Steinhoff employs over 100,000 people
and has a presence in 30 countries worldwide. Founded in 1964, the
company is traded on the Frankfurt Stock Exchange (FSE) and
Johannesburg Stock Exchange (JSE) and headquartered in
Stellenbosch, South Africa.
About Mattress Firm Holding Corp.
With more than 3,500 company-operated and franchised stores
across 48 states, Mattress Firm Holding Corp. (NASDAQ: MFRM) has
the largest geographic footprint in the United States among
multi-brand mattress retailers. Founded in 1986, Houston-based MFRM
is the nation's leading specialty bedding retailer with over $3.5
billion in pro forma sales in 2015. MFRM, through its brands
including Mattress Firm, Sleepy's and Sleep Train, offers a broad
selection of both traditional and specialty mattresses, bedding
accessories and other related products. More information is
available at www.mattressfirm.com. The Company's website is not
part of this release.
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version on businesswire.com: http://www.businesswire.com/news/home/20160807005021/en/
Steinhoff Contact:Mariza Nel, +27 (0)21 808 0711
(Investor Relations)Director, Corporate ServicesorMattress Firm
Investor Relations Contact:Scott McKinney, +1-713-328-3417Vice
President of Investor Relationsir@MattressFirm.comorMattress
Firm Media Contact:Jackson SpaldingErica Martinez,
+1-214-269-4404emartinez@jacksonspalding.com
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