Serta Simmons Bedding, LLC (SSB) and Tuft & Needle (T&N) recently announced that they have entered into a definitive agreement to merge the two companies and create one highly customer-centric house of bedding and mattress brands. The transaction brings together one of the world’s largest manufacturers, marketers and distributors of mattresses and a market disrupting, direct-to-consumer sleep product company. Terms of the deal have not been disclosed and the transaction is expected to close in the next 60 days.
Through this merger with T&N, SSB will strengthen its market leadership position and expand its offering in the direct-to-consumer segment. The combined company will offer innovative product lines, enhanced services and better value to consumers, while accelerating Tuft & Needle’s trajectory as a key direct-to-consumer mattress and bedding brand. By bringing the two companies together, the transaction is also expected to streamline operational efficiencies.
“Tuft & Needle is the original disruptor in the direct-to-consumer mattress industry and is a rare example of an economically healthy, fast growing start-up,” said Michael Traub, SSB chief executive officer. “Combining SSB’s nearly 150-year legacy and leadership in product innovation with Tuft & Needle’s expertise in delivering a best-in-class consumer experience, this merger will greatly accelerate our growth and innovation in the direct-to-consumer segment, and significantly enhance our e-commerce capabilities across brands. Together we have a clear path to transform the consumer experience at scale as well as the future of the industry.”
Tuft & Needle co-founders JT Marino and Daehee Park will report to SSB CEO Michael Traub and join the SSB leadership team. In addition to leading Tuft & Needle, in their expanded roles they will help drive the continued transformation of SSB into an omni-channel, consumer-centric company.
With this merger, SSB’s retail partners will have access to new offerings that will include advanced consumer insights, avenues for generating higher foot traffic, and consumer-centric innovations as key drivers for growth in the evolving market. This retailer program is expected to launch in early 2019. Tuft & Needle will lead the development of these omni-channel marketing tools for retailers.
“We started Tuft & Needle because we saw a clear opportunity for the mattress industry to put the customer at the center of everything it does. The industry is evolving faster than we could have imagined, and we're proud to have been the catalyst and driver for the transformation,” said JT Marino, T&N co-founder. “Under Michael’s leadership, SSB is actively driving toward evolution within the company and the greater market. By joining the SSB team, we look forward to fully leveraging each organization’s strengths and accelerating our trajectory together towards the vision of being recognized as the global leader in sleep. Tuft & Needle will continue to build our brand and culture in our unique way, while immediately beginning to infuse our learnings and capabilities into the broader SSB organization.”
Following the close of the transaction, each of the brands in the SSB portfolio will remain unique and independent in the market, while sharing a commitment to innovation with distinctive products and differentiated consumer experiences across channels. SSB’s current brand portfolio includes Serta, Beautyrest, Simmons, and Tomorrow. All brands will continue to serve consumers through traditional retail as well as direct-to-consumer channels.
SSB is backed by Advent International, a global private equity investor with deep expertise in the retail and consumer sector.
About Serta Simmons Bedding, LLC: Serta Simmons Bedding, LLC is the leading sleep company and the largest manufacturer, marketer and supplier of mattresses in North America. Majority-owned by Advent International, SSB owns and manages the two best-selling bedding brands in the mattress industry: Serta, which has five other independent licensees, and Beautyrest. The brands are distributed through national, hospitality, and regional and independent retail channels throughout North America. SSB also owns Tomorrow, a direct-to-consumer mattress brand. Based in Atlanta, SSB operates more than 30 manufacturing plants throughout the United States and Canada.
About Tuft & Needle: Tuft & Needle (“T&N” / TN.com) is a bootstrapped, Phoenix-based company that is the pioneer and leader among direct-to-consumer mattress startups. The company was founded in 2012 by JT Marino and Daehee Park to create exceptional mattress and bedding products and revolutionize the consumer sleep experience. T&N has served 1 million happy sleepers and was named as Entrepreneur’s Best Company Culture in 2017 and one of TIME’s best inventions. T&N is proud to have earned the highest customer loyalty score (Net Promoter Score of 74) in the mattress market, with over 95% of customers loving their mattress. T&N stores are available in Scottsdale, Gilbert and Seattle, with Kansas City planned to open in Q3 2018.
About Advent International: Founded in 1984, Advent International is one of the largest and most experienced global private equity investors. The firm has invested in over 340 private equity transactions in 41 countries and as of March 31, 2018, it had $41 billion in assets under management. With offices on four continents, Advent has established a globally integrated team of over 190 investment professionals across North America, Europe, Latin America and Asia. The firm focuses on investments in five core sectors, including business and financial services; healthcare; industrial; retail, consumer and leisure; and technology, media and telecom. After more than 30 years dedicated to international investing, Advent remains committed to partnering with management teams to deliver sustained revenue and earnings growth for its portfolio companies.