LEXINGTON, Ky. (April 8, 2014) — Tempur Sealy International, Inc. (NYSE: TPX), the world’s largest bedding provider, has signed a definitive agreement to acquire the Sealy brand rights in Japan and certain assets from its former licensee. The company anticipates closing the transaction, which is subject to customary closing conditions, during its fiscal third quarter of 2014. Financial terms were not disclosed.
As part of the transaction, certain functions of the former licensee, including sales and marketing, will be integrated into the company’s Japanese subsidiary. In addition, the companies have executed a supply agreement, whereby the former licensee will become a contract manufacturer for certain Sealy branded products in Japan.
“New market expansion is one of our four key strategic growth initiatives and is also an important driver in our long-term international revenue synergies targets. The acquisition of Sealy brand rights in Japan is the first transaction whereby we have regained rights from a Sealy licensee arrangement,” said Tempur Sealy International, Inc. CEO Mark Sarvary. “Japan has been an important market for our company for a long time and we are excited at the prospects of further increasing our penetration and market share with a strengthened brand and product offering.”
Chief Financial Officer Dale Williams said, “As a result of this transaction, we anticipate Japan will soon be our largest market as measured by sales outside of North America. Given our current expectation for when the deal will close, we anticipate the transaction will be break-even to modestly accretive to earnings in 2014 and accretive thereafter.”