Sleep Number Corporation (NASDAQ: SNBR) announced it received court approval for the sale of substantially all of its assets and ongoing business operations to SNBR Inc., a wholly owned subsidiary of Sleep Country Canada Inc., following a competitive auction.

The sale remains subject to customary closing conditions and is expected to close by July 31, 2026. Sleep Number said its day-to-day operations are continuing as normal during the process, including customer service, warranty fulfillment, and mattress deliveries.

Sleep Number President and CEO Linda Findley said the transaction addresses the company's financial constraints and positions the business for the future. "Combining with Sleep Country Canada enables us to achieve these goals, and today's Court approval paves the way for us to complete our transaction," Findley said.

Sleep Country Canada President and CEO Stewart Schaefer said the company sees an opportunity to drive growth across the U.S. and introduce Sleep Number products to Canada and other markets.

Sleep Number cautioned that its common shares were previously delisted from Nasdaq and that holders of common shares are expected to experience a complete or significant loss on their investment. Based on the purchase price in the sale agreement, the company said common shares are significantly out of the money with no expected recovery.

Sleep Number is advised by Davis Polk & Wardwell LLP as legal advisor and Guggenheim Securities as investment banker. Sleep Country Canada is advised by Goodwin Procter LLP, Davies Ward Phillips & Vineberg LLP, PwC, and National Bank of Canada Capital Markets.

The information in this article is based on a press release statement from Sleep Number Corporation.