Lexington-based mattress maker Tempur-Pedic International announced Monday it has finished its $1.3 billion acquisition of rival Sealy and also plans to change its corporate name to Tempur Sealy International to reflect the addition.
Each company's mattresses will continue to be branded as they were. The renaming is contingent on stockholder approval at the company's annual meeting in May. Shares of the company will continue to trade on the New York Stock Exchange under the TPX symbol.
"We remain confident that our shared know-how and expected efficiencies will result in tremendous value," CEO Mark Sarvary said in a statement. "Our focus now is on ensuring that our integration process remains on track and is as seamless as possible for all of our employees, customers and other stakeholders."
The combined company will continue to be based in Lexington, where Tempur-Pedic recently opened a new global headquarters off Newtown Pike.
Never miss a local story.
Sarvary has said the acquisition of Sealy was vital to address a more competitive landscape, which led to lower sales for Tempur-Pedic last year.
With Sealy and its inner-spring mattresses as part of the company's portfolio of products, Tempur-Pedic will benefit from having all types of mattresses available for sale. The acquisition will also allow Tempur-Pedic to save on manufacturing and distribution costs, Sarvary has said.
But the acquisition of Sealy has been greeted with some skepticism.
Analyst Jon Andersen of William Blair noted in a research report to clients in October that "while the Sealy transaction may ultimately improve Tempur's broader market positioning, we remain cautious nearer term given persistent heightened competition in the company's core specialty segment."
He also noted that the acquisition opens Tempur-Pedic to risks because the inner-spring mattress segment in which Sealy is a major player is not as profitable or experiencing high growth.