CARTHAGE, MO - Leggett & Platt is buying up Tempur Sealy's innerspring components business for $48 million. The sale includes Tempur Sealy's three U.S. innerspring production facilities and equipment, along with associated working capital.
The world's largest bedding provider, Tempur Sealy International (NYSE: TPX) said it is exiting the innerspring components business in the U.S. Leggett & Platt will become Tempur Sealy's exclusive long-term supplier of the components in the U.S. and Canada.
Tempur Sealy CEO Mark Sarvary said, "Our decision to exit the production of innerspring components in the U.S. will allow us to focus our investments on brand building and product innovation while improving our working capital position. Leggett & Platt is a well-established leader in the industry and our expanded relationship will provide significantly greater flexibility for our product development efforts."
The agreement is expected to grow Leggett & Platt's (NYSE: LEG) sales approximately 2%, said Board Chair and CEO David Haffner. "The additional production should enhance economies of scale, benefit from our vertical integration in steel rod and wire, and allow manufacturing optimization across a broad asset base."
Leggett & Platt manufactures components for residential furniture and bedding, office furniture, drawn steel wire and automotive seat support and lumbar systems; as well as carpet underlay, adjustable bed bases and bedding industry machinery.
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