Mattress Firm, Heavily in Debt, Files for an IPO

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The mattress firm emerged from bankruptcy more than three years ago and is now seeking to go public.

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David Paul Morris/Businesshala

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The mattress firm made public the prospectus for its initial public offering on Friday. The Houston-based retailer emerged from bankruptcy more than three years ago.

A prospectus states that the company is seeking to raise $100 million. The company did not disclose how many shares it would offer or their price range. This will come with future filings. $100 million is also considered a placeholder that will change with more information.

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The mattress firm plans to trade on the New York Stock Exchange under the ticker MFRM.

The mattress firm confidentially filed for an IPO in September. Goldman Sachs,

barclays,
and Jefferies is the lead underwriter on the deal.

Founded in 1986, Mattress Firm is a bedding retailer that sells mattresses, frames, pillows, and dog beds through its 2,353 brick-and-mortar stores. The company also sells products On digital platforms matricefarm.com and sleep.com. The mattress firm said it is a leading retailer of brands including Tempur-Pedic,
Serta, Seeley, Purple, Stearns & Foster, and Beautyrest.

Steinhoff International Holdings
Mattress firm acquired for $3.8 billion in 2016. The mattress firm sought Chapter 11 bankruptcy protection in October 2018, when it had more than 3,200 stores. It emerged a month after bankruptcy with about 2,600 stores.

The retailer is the latest company to seek an IPO after emerging from bankruptcy protection. Rental car company Hertz Global Holding (ticker: HTZ) uplisted its shares to the Nasdaq in November after exiting Chapter 11 in June.

Mattress Firm remains significantly leveraged. According to the prospectus, as of September 28, total liabilities stood at approximately $3.5 billion, while net long-term debt was approximately $1.2 billion. In September, the retailer paid a dividend of $1.2 billion to its common shareholders, including Steinhoff, brochure said,

Steinhoff Group, which has been embroiled in an accounting scamThe prospectus states that it also has substantial debt, is highly leveraged, and is involved in various disputes and legal proceedings.

The mattress firm will not receive any proceeds from the IPO. Shareholders, including Steinhoff, are selling stock in the company. The prospectus did not elaborate on how much of the company Steinhoff currently owns. That too will come with future filings.

In March 2020, at the height of the COVID-19 pandemic, the mattress firm closed nearly 50% of its stores. The prospectus said it temporarily fired 4,687 field associates and 224 corporate support personnel. The company is not profitable, reporting a loss of $165.1 million in fiscal 2021, compared to $125.6 million in profit in 2020. The increase in customer transactions helped the mattress firm’s revenue grow nearly 35% to about $4.4 billion in 2021.

Write to Louisa Beltran at [email protected]

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