LEXINGTON, Ky. — Tempur Sealy International has executed an agreement to acquire Dreams, the leading specialty bed retailer in the United Kingdom, primarily from an affiliate of Sun Capital Partners Inc. The transaction will accelerate Tempur Sealy’s growth in the largest European bedding market and the sixth-largest economy in the world.
The transaction price is approximately $475 million, less net debt and any working capital deficit.
Dreams has developed a successful multi-channel sales strategy, with over 200 brick and mortar retail locations, an industry-leading online channel, as well as manufacturing and delivery assets. Dreams generated sales of approximately $400 million and earnings before interest, taxes, depreciation, and amortization (EBITDA) of approximately $75 million for the year ending December 31, 2020. Dreams is expected to generate annual sales of approximately $450 million in the first year post-acquisition.
Dreams will be operated as an independent business unit and led by the current management team. It is expected to complement the company’s existing UK Tempur operations and its recently-formed Sealy UK joint venture operations.
After the transaction closes, Tempur Sealy’s annualized worldwide direct-to-consumer business is expected to reach $1 billion in sales and its international segment will represent over 20% of consolidated sales. The transaction is expected to close in the third quarter of 2021, subject to receipt of regulatory approval from the UK Financial Conduct Authority.