Gina Johnson
Sleep Country USA, a mattress retailer with over 70 locations in Washington and Oregon, changed its name to Sleep Train in 2015. Sleep Train was then acquired by Mattress Firm, the largest mattress retailer in America, in 2016. Sleep Country Canada, unaffiliated with Sleep Country USA, was acquired by Fairfax Financial in 2024 for $1.7 billion.
| Characteristics | Values |
|---|---|
| Sleep Country USA Rebranding | Sleep Country USA was rebranded as Sleep Train in 2015 |
| Sleep Country Canada | Unaffiliated with Sleep Country USA, but shares the same jingle |
| Sleep Train Acquisition | Sleep Train was acquired by Mattress Firm in 2015 |
| Mattress Firm Expansion | Mattress Firm expanded to over 3,500 stores through acquisitions |
| Bankruptcy | Mattress Firm filed for Chapter 11 bankruptcy in 2020 due to overexposure in certain markets |
| Fairfax Acquisition | Sleep Country was acquired by Fairfax Financial in 2024 for $1.7 billion |
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What You'll Learn
Sleep Country USA rebrands as Sleep Train
Sleep Country USA, a mattress retailer with over 70 locations in Washington and Oregon, changed its name to Sleep Train in 2015. Sleep Country USA and Sleep Train had operated separately under the same business model for nearly a decade, and the name change served to unify the two companies.
Sleep Train is a California-based company that was acquired by Mattress Firm in 2015. Mattress Firm, the largest mattress retailer in America, has over 3,400 store locations across 49 states and Washington, D.C. The company has expanded rapidly over the past decade by buying out competitors such as Sleep Train, Sleep Country USA, and Sleepys.
Sleep Country USA's name change to Sleep Train was part of a broader rebranding strategy by Mattress Firm to consolidate its mattress stores under one name. In 2017, Mattress Firm unified its Sleep Train and Sleepy's locations under the Mattress Firm brand. This move allowed the company to provide a better selection and pricing for its customers by leveraging its ability to buy in larger quantities.
The Sleep Train brand is known for its award-winning Foster Kids program, which collects items for foster children in the Northwest. By joining Mattress Firm, the Sleep Train Foster Kids program expanded its reach, uniting with Mattress Firm's own Foster Kids program and adding nearly 100 nonprofit foster care organization partners to help more than 400,000 foster children nationwide.
In 2024, Sleep Country Canada Holdings Inc. was acquired by Fairfax Financial Holdings Limited for $1.7 billion. Sleep Country's management believed that the transaction demonstrated the strength of its brands and organization and would provide significant value to its shareholders.
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Sleep Train and Mattress Firm unify
Sleep Train and Mattress Firm unified under one brand in 2017, with Sleep Train stores joining Mattress Firm's 3500 company-operated and franchised stores across the country. The unification resulted from Mattress Firm's acquisition of Sleep Train in 2014 for $425 million.
Sleep Train, founded by entrepreneur Dale Carlsen in 1985, operated primarily in California, Washington, Oregon, Idaho, Nevada, and Hawaii, with over 300 stores. The acquisition of Sleep Train allowed Mattress Firm to expand its presence on the West Coast, particularly in California, where Sleep Train was based.
Following the unification, all Sleep Train stores were renamed Mattress Firm, resulting in a total of 318 rebranded stores. The unification brought together the companies' similar business models and philanthropic platforms, allowing for a broader selection of products and improved pricing for consumers.
Both Sleep Train and Mattress Firm had well-established Foster Kids programs supporting foster children. The unification of these programs added nearly 100 nonprofit foster care organization partners, expanding the reach and impact of their philanthropic efforts.
The decision to unify under one brand was part of a strategy to streamline operations and create a stronger, unified presence in the market. This move also allowed for more effective marketing and advertising campaigns, helping the company compete more effectively in the mattress retail industry.
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Fairfax Financial acquires Sleep Country
Sleep Country Canada Holdings Inc. has been acquired by Fairfax Financial Holdings Ltd. for a deal worth $1.7 billion. The deal was announced in July 2024 and saw a subsidiary of the Toronto-based financial holding company, 16133258 Canada Inc., acquire all issued and outstanding common shares of Sleep Country for $35 per share. This price represented a 28% premium on the previous Friday's closing share price of $27.28.
Sleep Country's CEO, Stewart Schaefer, said the deal would "unleash" the company's true value and that he was attracted to Fairfax because they did not plan to change anything about Sleep Country's business. He also admired Fairfax founder Prem Watsa and respected the way the company valued Sleep Country's brand and employees. Christine Magee, co-founder of Sleep Country, added that the deal was the product of "extensive negotiation" and would provide "immediate value to shareholders".
The acquisition of Sleep Country adds to Fairfax's retail prowess, with the company having previously owned Toys "R" Us Canada, as well as owning stakes in Sporting Life and Golf Town. The deal is expected to close in the fourth quarter of 2024 and is subject to court approval, a shareholder vote, and other customary conditions. Following the completion of the deal, Sleep Country will apply to delist from the Toronto Stock Exchange and cease to be a reporting issuer under Canadian securities laws.
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Sleep Country Canada Holdings Inc. announces arrangement agreement
Sleep Country Canada Holdings Inc. announced on July 22, 2024, that it had entered into an arrangement agreement with 16133258 Canada Inc. The agreement, dated July 21, 2024, outlined that Sleep Country would be acquired by Fairfax Financial Holdings Limited (Fairfax). The acquisition would see Fairfax acquire all the issued and outstanding common shares of Sleep Country for $35.00 in cash per common share.
The arrangement was subject to approval by the Ontario Superior Court of Justice (Commercial List) and regulatory approval under the Competition Act (Canada). It was also contingent on the satisfaction of other customary closing conditions and the receipt of required approvals. The completion of the arrangement was not subject to any financing conditions.
Sleep Country agreed to pay Fairfax a termination fee of $36.5 million if the arrangement agreement was terminated under specific circumstances. The agreement included customary non-solicitation covenants, allowing Sleep Country to terminate under a "fiduciary out" provision.
Sleep Country's diverse retail banners include Dormez-vous, Endy, Silk & Snow, Hush, and Casper Canada, with 307 corporate-owned stores and 18 warehouses across Canada. The company is committed to fostering an inclusive and diverse company culture, recognised by Waterstone Human Capital in 2022.
On September 26, 2024, Sleep Country announced that the arrangement with Fairfax had received final court approval. The acquisition was completed on October 1, 2024, with shareholders approving the arrangement at a special meeting held on September 18, 2024.
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Sleep Country's $1.7 billion acquisition
Sleep Country Canada Holdings Inc. (TSX: ZZZ) was acquired by Fairfax Financial Holdings Limited (TSX: FFH) (TSX: FFH.U) for $1.7 billion in July 2024. The acquisition was made through a wholly-owned subsidiary of Fairfax, 16133258 Canada Inc. The purchase price represented a 34% premium to the 20-day volume-weighted average price of Sleep Country's common shares on the TSX for the period ending on July 19, 2024, and a 28% premium to the closing price on the same day.
Sleep Country, headquartered in Toronto, counts 307 stores and 18 warehouses across its collection of brands. These brands include mattress retailers Sleep Country and Dormez-vous, bed-in-a-box companies Endy, Casper Canada, and Silk & Snow, premium bedding chain The Rest, and blanket business Hush.
Christine Magee, who co-founded Sleep Country in 1994 and now chairs a special committee of independent directors, stated that the deal was the product of "extensive negotiation" and a comprehensive assessment process. She believes the acquisition will provide "significant and immediate value" to shareholders, who will likely view the deal as "fair" and in their "best interests." Sleep Country president and chief executive Stewart Schaefer echoed similar sentiments, stating that the transaction demonstrates the "value and strength" of the company's brands and organization.
Sleep Country Canada is unaffiliated with Sleep Country USA, which changed its name to Sleep Train in 2015. Sleep Country USA was later acquired by Mattress Firm, which also acquired Sleep Train and Sleepy's, expanding to over 3,500 stores. In 2016, Mattress Firm was acquired by Steinhoff International for $3.8 billion, creating the world's largest mattress retail distribution company.
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Frequently asked questions
Sleep Country was acquired by Fairfax Financial Holdings for $1.7 billion in 2024. Sleep Country Canada Holdings Inc. agreed to sell all issued and outstanding common shares for $35 per share, a 28% premium to the Friday closing share price before the deal was announced.
Sleep Country's CEO, Stewart Schaefer, said that the company wasn't looking to sell itself, but that private equity suitors were always lurking. He added that the deal with Fairfax would unleash Sleep Country's true value. Christine Magee, co-founder of Sleep Country, said that the deal would provide immediate value to shareholders.
Sleep Country is a mattress retailer that began as a single mattress store in Vancouver in 1994. It eventually expanded to 307 stores and 18 warehouses across Canada.
