Dive Brief:

• Mattress Firm on Monday formally asked the Securities and Exchange Commission to withdraw its initial public offering registration with federal regulators. The company confidentially filed for an IPO in September 2021 and made its intent public in January 2022.
• But “in light of the ongoing volatility in the IPO market and following careful consideration with external advisors,” the company decided to back out of its IPO plans. Mattress Firm set an initial offering of $100 million but noted then that the price could change.
• At the time of its IPO filing, the company had $1.2 billion in long-term debt and total liabilities of $3.5 billion. For the nine months ending in June, Mattress Firm said its comparable sales increased by 2%. Had the IPO gone forward, the company would have traded on the New York Stock Exchange under the ticker symbol “MFRM.”

Dive Insight:

The current market is apparently too restless for Mattress Firm right now.

Mattress Firm also said it “believes that the withdrawal of the Registration Statement is consistent with the public interest.” In its application to withdraw the IPO, the company told the SEC that it has not sold any securities pursuant to the registration statement. Parent company Steinhoff International Holdings said it “continues to actively explore all options and paths forward, including resuming the IPO process once the markets are favorable.” 

But Mattress Firm’s decision to back out of its IPO could signal that the company is receptive to or could benefit from an acquisition, according to Wedbush analysts cited by Furniture Today. Mattress manufacturer Tempur Sealy International is at the top of the list of entities that may have an interest in acquiring Mattress Firm, according to that report.

Over the last five years, Mattress Firm has experienced some major business changes.

It was previously a public company. Steinhoff acquired Mattress Firm in 2016 for $3.8 billion. Two years later, Mattress Firm entered, then left Chapter 11 bankruptcy. In 2020, Steinhoff agreed to pay about $1.6 billion to settle legal claims with investors. Legal troubles arose when an independent report found Steinhoff was involved in a $7.4 billion accounting fraud by overstating its profits, according to reports at the time. 

In September 2021, Mattress Firm paid a $1.2 billion dividend to holders of its common stock. Those individuals included members of the company’s executive team. To get that money, the company took out a loan for the same amount that month.

Houston-based Mattress Firm is best known for its large brick-and-mortar footprint of stores that sell sleep-focused products – mattresses, beds and frames, and bedding. It employs about 6,500 people. and sells many well-known mattress brands, including Sealy, Serta, Simmons, Tempur-Pedic and Purple.

Steinhoff describes Mattress Firm as “the largest omnichannel mattress specialty retailer in the United States, with more than 2,300 retail stores nationwide, giving it the largest national, coast-to-coast retail footprint of any mattress specialty retailer” in America.