Sleep Country Canada sets Sleep America buy; Gabys will stay on
By Michael J. Knell -- Furniture Today, February 27, 2006
Toronto — Sleep Country Canada Income Fund, owners of Canada's largest sleep shop chain, has signed a letter of intent to acquire Sleep America Inc., the largest mattress retailer in Arizona.
Sleep America has 32 stores in the Phoenix and Tucson areas.
Sleep Country CEO Stephen Gunn said that at the proposed purchase price, the acquisition is expected to be immediately boost earnings. He said it will be funded through a combination of cash on hand and long-term debt, although the purchase price was not disclosed.
The deal is expected to close before the end of March.
"Joining forces with Sleep America represents a low-risk opportunity to assume a leading position in one of the most attractive markets in the United States," Gunn said. "Len and Debbie Gaby, the owners and founders, and their existing management team will continue to drive the success of their business model, which is virtually identical to ours. Sleep America enjoys the same competitive advantages that we do in our markets, including strong brand recognition, superior in-store and home delivery service and strong relationships with suppliers."
"We are delighted to be teaming up with Sleep Country Canada," said Sleep America President Debbie Gaby. "Sleep Country Canada shares our values, our culture and our approach to building a successful company through a passion for customer service. In many ways, our two companies are complete replicas of each other."
It is the second major acquisition for Sleep Country Canada in as many months. In early January, it acquired the Montreal-based Dormez-Vous, a five-unit sleep specialist, giving it a long-sought foothold in the Quebec market.
Sleep Country Canada has 116 stores in nine regional markets from British Columbia to Quebec. For the first nine months of 2005, it had sales of C$162.5 million, up 12.1% from the previous year.
