Calera Capital is pleased to announce that HMK Mattress Holdings LLC (“Sleepy’s” or the “Company”), a portfolio company of Calera Capital Partners IV (“Fund IV”), has completed its sale to Mattress Firm, Inc. (“MFRM”) for $780 million.  Fund IV and its related co-investors will be receiving a combination of cash and shares of Mattress Firm common stock.

With the acquisition of Sleepy’s, Mattress Firm is the first truly national mattress retailer with $3.7 billion in sales and $359 million in PF EBITDA.  With over 3,500 stores, Mattress Firm has a market share of 21% in a relatively fragmented industry.  With its #1 position and scale, Mattress Firm will be able to leverage nationwide distribution & delivery as well as national advertising; generate sourcing efficiencies; have access to exclusive partnership opportunities; and better leverage the combined operating expense base.    

Calera Capital’s investment in Sleepy’s was a result of a directly negotiated, proprietary deal after an introduction to management by one of Calera’s portfolio company founders.  Consistent with Calera’s strategy, Sleepy’s founders and management rolled forward substantial equity as part of the transaction in March 2012.    

With Calera’s help, Sleepy’s grew revenues by 36% to over $1.1 billion, grew the store count to over 1,050 stores, and successfully expanded into the Midwest and North Carolina.  The Company also acquired Mattress Discounters, solidifying its fortress position in the Mid-Atlantic.  Key operational areas were strengthened by successfully recruiting a new CFO, CMO, VP Sales and VP Real Estate, among other key managers.  As a result of Sleepy’s recent momentum and its highly defensible and critical strategic position in the Northeast, Mattress Firm offered to acquire the Company at a strategic valuation.