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Houston-based Mattress Firm has announced plans to buy Sleepy's, its top competitor, in a merger valued at $780 million in cash and stock. The deal will give the Houston company full control of Sleepy's parent, HMK Mattress Holdings, based in Hicksville, New York.
Mattress Firm CEO Steve Stagner spoke to investors in a conference call just after the close of business on Monday.
"With Sleepy's, we are joining forces with a specialty retailer with a leading market share position in the Northeast and Mid-Atlantic, operating over 1,050 stores in 17 states and the District of Columbia," Stagner said.
The Houston firm is already the nation's largest specialty mattress retailer. Buying Sleepy's would expand its footprint to 3,500 stores, with annual sales of $3.6 billion.
"We anticipate approximately $40 million of identifiable cost synergies by the third year post-closing," said Alex Weiss, Mattress Firm's chief financial officer.
Mattress Firm's chief operating officer, Adam Blank, will take over as president of Sleepy's operations following the merger. Pending regulatory approval, the deal is expected to close by mid-2016.
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