Dreams, the leading UK bed and mattress retailer, is to be acquired by Tempur Sealy International (TPX) from Sun European Partners LLP for an expected purchase price of approximately £340 million. This marks a significant moment for Dreams as it continues to build on its successful turnaround journey.
Dreams’ management team will stay in place, led by Mike Logue who was appointed in 2013. Dreams will continue its day-to-day operations and remains committed to its strategy to deliver industry leading customer service, a strong online platform and excellent products.
With 2,000 employees across the UK, Dreams sells 11,500 mattresses, bases and headboards per week to customers nationwide through its network of over 200 stores and online. It makes all of its own-brand mattresses at its factory in Oldbury, UK. It currently makes 290,000 mattresses and over 160,000 divan bases a year before delivering to customers all across the UK through its 11 delivery centres and fleet of 140 vehicles.
The sale is a significant moment for the business, and a marker of the turnaround journey it has been on over the last eight years. Dreams has delivered six years of consecutive growth and generated sales of approximately £327 million excluding VAT in 2020.* Tempur Sealy’s support and expertise will enable Dreams to continue this journey, driving its growth plans over the coming years.
Mike Logue, CEO of Dreams, commented: “We are delighted to be joining the Tempur Sealy family. Today marks a milestone for Dreams. It is recognition of the transformation we have delivered, and is an endorsement of our customer-focused strategy, our culture and our values. With Tempur Sealy we expect to drive our growth strategy and build on our position as the most recommended, specialist bed retailer. I would like to take this opportunity to thank our 2,000 colleagues for their hard work, dedication and commitment. Together we will continue to improve what we make, sell and deliver, to provide better sleep for all our customers.”
Tempur Sealy International, Inc. chairman and CEO Scott Thompson said: “Dreams has created a strong brand and business model, known for its outstanding products and customer service. We have partnered with Dreams for many years and they are one of the most talented retailers we work with, consistently demonstrated best-in-class web marketing and sales capabilities. This acquisition makes both organizations stronger, better positioned to service customers and bring innovative products to market. We look forward to welcoming the entire Dreams organization to the Tempur Sealy family.”
“This transaction is consistent with our stated strategy of acquiring companies when we see their addition as mutually beneficial and accretive to long-term shareholder value. We expect over time to realize synergy opportunities and long-term sales growth.”
“Our work with Dreams underscores our strength in partnering with outstanding management teams to accelerate value creation,” said Paul Daccus, Managing Director, Sun European Partners, LLP. “We are very pleased that our extensive experience in enhancing operations and capitalizing on new opportunities allowed us to achieve this positive outcome for Dreams and our investors.”
The transaction is expected to close in the third quarter of 2021, subject to receipt of regulatory approval from the Financial Conduct Authority.
Following the news of Tempur Sealy’s acquisition of the beds retailer Dreams; Matt Walton, senior data analyst at GlobalData, a leading data and analytics company, offers his view: “The turnaround of Dreams, which went from a pre-pack administration deal in early 2013 to the UK’s leading beds specialist by 2019, is now fully complete following its £340m acquisition by American mattress manufacturer, Tempur Sealy from private equity owner, Sun European Partners.
A lot of credit for this recovery must go to Dreams’ CEO Mike Louge, for implementing a successful strategy which focused on overhauling store environments, developing its online offer and improving product quality at its Oldbury factory. The takeover could see Dreams becomes the exclusive distributor of Tempur products in the UK, a move which would impact John Lewis, Bensons for Beds, Furniture Village and some independents.
This acquisition provides Tempur Sealy with a stronger vertically integrated supply chain which will help it achieve greater economies of scale, and help it avoid the levels of disruption which others have seen in the sector following the shortage of foam in Europe at the end of 2020. While Tempur does already operate a select number of its own stores, this acquisition will significantly increase its reach across the country.”