This week's announcement by Houston based Mattress Firm that it has acquired Texas chain Sleep Experts has led many to hope that our apparent surplus of bed retailers will be ending soon. Further study of the Press Release suggest the high margin sector is capable of supporting all our local stores.
HOUSTON--(BUSINESS WIRE)-- Mattress Firm Holding Corp. (the "Company") (NASDAQ:MFRM), a leading specialty retailer of mattresses and accessories in the United States, announced that the Company entered into an agreement to acquire the outstanding equity interests of Sleep Experts Partners, L.P., which operates Sleep Experts retail stores in Texas. Additionally, on March 3, 2014, the Company completed the acquisition of substantially all of the assets and operations of Yotes, Inc., which operated stores under the Mattress Firm brand in Colorado and Kansas, as well as the Virginia retail operations of Southern Max, LLC. Both companies were Mattress Firm franchisees and Southern Max, LLC will continue its franchised operations in Tennessee.
Collectively, these accretive acquisitions will add approximately 93 specialty retail stores to the Mattress Firm company-operated store base, of which approximately 56 stores are located in Texas with the remainder in Colorado, Kansas and Virginia. The aggregate purchase price for these acquisitions is approximately $80.5 million, subject, in each case, to customary adjustments.
"These acquisitions will further fortify our market-leading position in key growth markets by expanding our presence in prime areas of the country. We believe that the addition of an impressive number of high performing stores at the same time also provides the Company with the opportunity to further enhance the operating performance and cash flow of these stores at an accelerated pace as we integrate them onto our efficient corporate operating platform," stated Steve Stagner, Mattress Firm president & Chief Executive Officer. "We are excited that these opportunities bring us closer to becoming the first national specialty bedding retailer, reaching border to border and coast to coast. We continue to remain focused on our relative market share strategy while driving long-term value creation for our shareholders."
The closing of the Sleep Experts acquisition is expected to occur in the first fiscal quarter of 2014, subject to the prior satisfaction of customary closing conditions. Assuming the acquisition is consummated, the Company expects that the blended earnings per diluted share, on a generally accepted accounting principles basis, will be $0.03 to $0.05 accretive in the Company's full fiscal year ending February 3, 2015 ("fiscal year 2014").
The Company expects to provide additional details on the acquisitions and to provide an update on the Company's fiscal year 2014 guidance on March 13, 2014 with the release of its earnings results for the full fiscal year (52 weeks) ending January 28, 2014.