Mattress Firm (MFRM) Acquires Factory Mattress & Water Bed for $11.2M

December 4, 2012 4:07 PM EST
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Subsequent to the end of the third fiscal quarter, in November 2012, Mattress Firm Holding Corp. (NASDAQ: MFRM) entered into an agreement to acquire the assets and operations of Factory Mattress & Water Bed Outlet of Charlotte, Inc. (dba “Mattress Source”), including 28 mattress specialty stores in North Carolina and South Carolina, for approximately $11.2 million, subject to customary adjustments. The closing of the acquisition, which is conditioned on the prior satisfaction of customary closing conditions, is expected to occur by the end of the fourth fiscal quarter of 2012 and will be funded by cash reserves and revolver borrowings. The Company intends to rebrand the stores as Mattress Firm subsequent to the closing of the transaction.

Consistent with our core relative market share strategy, the Mattress X-Press and pending Mattress Source acquisitions will add stores in markets where Mattress Firm currently has company-operated stores. The addition of the acquired stores, once rebranded, is expected to drive advertising efficiency and improved market-level profitability in those markets.

The effect of rebranding on the sales per store performance of the former Mattress Giant stores has continued to be positive, as demonstrated by the charts accompanied in this release.

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