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TSI sues FTC in continuing battle over Mattress Firm acquisition

TSI sues FTC in continuing battle over Mattress Firm acquisition

Tempur Sealy International filed a complaint in the United States District Court for the Southern District of Texas seeking an injunction against the Federal Trade Commission’s administrative proceeding challenging the company’s merger with Mattress Firm.

The action filed asks the Southern District of Texas to prevent the FTC from challenging the merger via its own separate administrative proceeding in addition to the federal court proceeding that is pending in the Southern District of Texas, as it violates constitutional protections.

The company’s agreement to acquire Mattress Firm is already being challenged in federal court by the FTC, with the hearing scheduled to begin on Nov. 12 and expected to last two weeks.

“The bedding industry is highly competitive, including thousands of brick-and-mortar storefronts and a vast online marketplace,” says Tempur Sealy Chairman and CEO Scott Thompson. “The combination of Tempur Sealy and Mattress Firm will deliver incremental benefits to consumers and opportunities for employees, from enhanced product innovation to an improved customer buying experience and strengthening the entire financial position for the company. We intend to vigorously defend our transaction in the upcoming trial in federal court, which is the proper forum to address this issue.”

The company continues to believe that a successful litigation process can be completed in the coming months, which would allow the transaction to close in late 2024 or early 2025, consistent with previous expectations.

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This comes on the heels of the company successfully pricing its previously announced senior secured Term Loan B facility in an aggregate principal amount of $1.6 billion. The Term Loan B will mature seven years after the date of closing of the Term Loan B, which is expected to occur in the next few weeks.

Tempur Sealy intends to use the proceeds from Term Loan B, together with cash available and proceeds from other debt, solely to fund the cash required for the previously announced acquisition of Mattress Firm. The Term Loan B will close and fund into escrow with the proceeds to be released concurrently with the closing of the Mattress Firm acquisition.

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