Mattress Firm Acquired for $2.4 Billion

Steinhoff International Holdings agreed to buy Mattress Firm Holding Corp. for about $2.4 billion, a deal that vaults the South African discount retailer into the U.S. market while creating the world's largest bedding giant. Steinhoff offered $64 a share in cash, more than double Friday's $29.74 closing price for Houston-based Mattress Firm. The acquisition of the largest U.S. specialty mattress retailer included net debt that raised the deal's enterprise value to about $3.8 billion, the companies said Sunday in a statement. Directors at both companies have approved the takeover, which is expected to be completed by the end of the third quarter, according to the statement.

Total Retail's Take: The M&A activity in the retail industry continues. Just in the last week, Wal-Mart announced that it's acquiring Jet.com (for the highest price ever paid for an e-commerce company), and Hanna Andersson reported that it was selling to a private equity firm. In the case of Mattress Firm, there appears to be two things in play here: one, it got an offer it couldn't refuse — more than double the share price at Friday's closing bell — and, two, the retailer, which acquired competitor Sleepy's last year, was faced with declining sales in what's becoming an increasingly crowded category, with online startups such as Casper and Saatva taking away market share from Mattress Firm. The time was right to cash in.