CAPE TOWN, South Africa, Aug. 8 (UPI) -- South Africa's Steinhoff International Holdings NV will purchase Houston-based Mattress Firm Holding Corp. for $2.4 billion, its first entry into the U.S. market.
Steinhoff, headquartered near Cape Town, offered about $2.4 billion, or $64 per share, for Mattress Firm, owners of the Sleepy's chain of mattress retailers. The bid is 155 percent of Mattress Firm's Friday closing price of $29.74 per share.
Known as "Africa's Ikea" for selling home furniture and apparel in stores across the continent, Steinhoff expanded into Europe earlier this year with its $794 million purchase of Poundland Group PLC, a chain of discount stores. A Steinhoff statement said the acquisition of Mattress Firm will "create the world's largest multi-brand mattress retail distribution network."
Mattress Firm bought Sleepy's in 2015 for $780 million, forming a network of 3,500 stores in 48 states. The expansion improved sales, as the companies merged under the Mattress Firm name, but resulted in rising costs. I issued a warning in June it expected a loss for the fiscal year, and the value of its shares has fallen 52 percent in the past year.
Steinhoff has 2,300 stores, in Africa, Europe, Asia and Australia. It was founded in Germany as a family-owned furniture store in 1964, and boomed after 1989, selling goods in the former East Germany. It acquired a South African furniture company in 1997, beginning its growth in Africa.