Sleep Innovations has signed an agreement to be purchased by Sun Capital Partners.
The agreement brings to a close Sleep Innovations’ search for an equity partner, begun earlier this year. The company had hired the investment banking firm of Sawaya Segalas & Co., which served as an advisor as Sleep Innovations explored the sale of its business.
Michael Thompson, Sleep Innovations’ president and CEO, said, “Given its wide range of portfolio companies, financial strength and operating expertise, Sun Capital offers Sleep Innovations the breadth of financial and operating capabilities to support the future growth of the company.”
At the time the company announced its naming of Sawaya Segalas as advisor, Thompson said a sale “would allow us to have a potential lower cost of capital, which would allow us to invest back in the business.”
The lower cost of capital is crucial to Sleep Innovations, Thompson said. “We’d like to get to market quicker rather than slower,” he said. “Lower cost of capital would allow us to do that.”
For Sun Capital, the pending acquisition will mark a return by the investment firm to the bedding industry. The company acquired specialty retailer Mattress Firm in 2002, and then sold it to a group consisting of equity firm J.W. Childs and senior Mattress Firm management in 2007. “Sleep Innovations will benefit from our extensive experience in the bedding and retailing industries as the company looks to continue on a growth path,” said Marc Leder, Sun Capital’s co-CEO.—David Gill