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Sealy (formerly the Sealy Corporation) is an American brand of
mattress A mattress is a large, usually rectangular pad for supporting a lying person. It is designed to be used as a bed, or on a bed frame as part of a bed. Mattresses may consist of a quilted or similarly fastened case, usually of heavy cloth, conta ...
es marketed and sold by Tempur Sealy International. It draws its name from the city where the Sealy Corporation originally started,
Sealy, Texas Sealy is a city in Austin County in southeastern Texas, United States. The population was 6,839 at the 2020 census. Sealy is located west of the downtown Houston area, on the most eastern part of the Texas-German belt region, an area settled by ...
, United States.


History

In 1881, cotton gin builder Daniel Haynes lived in Sealy, Texas, located west of
Houston Houston (; ) is the most populous city in Texas, the most populous city in the Southern United States, the fourth-most populous city in the United States, and the sixth-most populous city in North America, with a population of 2,304,580 ...
. He began making cotton-filled mattresses for his friends and neighbors. In 1889, he
patent A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an enabling disclosure of the invention."A ...
ed an invention that compressed cotton for use in his mattresses. Eventually the mattresses became so popular he was able to sell the patents to manufacturers in other markets. The term "Mattress from Sealy" was coined to describe what was produced. During 1906, after much success as an advertising executive, Earl Edwards purchased the patents and gained manufacturing knowledge from Haynes. Edwards took the name "Sealy" for his new company and expanded it to a national market. Due to lack of funding for manufacturing, Sealy expanded using a
licensing A license (or licence) is an official permission or permit to do, use, or own something (as well as the document of that permission or permit). A license is granted by a party (licensor) to another party (licensee) as an element of an agreeme ...
-expansion similar to that of
Coca-Cola Coca-Cola, or Coke, is a carbonated soft drink manufactured by the Coca-Cola Company. Originally marketed as a temperance bar, temperance drink and intended as a patent medicine, it was invented in the late 19th century by John Stith Pembe ...
. By 1920, Sealy had 28 licensed plants and was the first mattress company to expand using a licensing program. During the
Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...
the mattress industry was hit hard. Sealy lost most of its licensees and narrowly escaped
bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debto ...
itself. The company consolidated with the surviving licensees and created what is now known as Sealy, Incorporated. Sealy operated as a franchisor out of its Chicago headquarters. Its licensees were, under the terms of their licensing agreement, only supposed to sell in a designated trading area that did not conflict with those of other franchisees. The largest licensee, Cleveland-based Ohio Mattress Company (founded by the Wuliger family and operated by Ernest M. Wuliger), defied these restrictions and sold into markets reserved for other franchisees. The conflict resulted in Ohio Mattress filing an antitrust suit against Sealy in 1971. The issue was decided fifteen years later with a near-total victory for Ohio Mattress. Unable to come up with the $77m award, Sealy Incorporated and all but one of the other franchisees were forced to sell to Ohio Mattress, and the company became the world's largest bedding manufacturer by sales. Merchant banking firm Gibbons Green Van Amerongen took Sealy private in an April 1989
leveraged buyout A leveraged buyout (LBO) is one company's acquisition of another company using a significant amount of borrowed money ( leverage) to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loa ...
, a deal which netted Sealy shareholders US$965m. First Boston made a bridge loan to the buy-out firm just as
Drexel Burnham Lambert Drexel Burnham Lambert was an American multinational investment bank that was forced into bankruptcy in 1990 due to its involvement in illegal activities in the junk bond market, driven by senior executive Michael Milken. At its height, it was ...
was running into trouble and the
junk bond In finance, a high-yield bond (non-investment-grade bond, speculative-grade bond, or junk bond) is a bond that is rated below investment grade by credit rating agencies. These bonds have a higher risk of default or other adverse credit events ...
market was drying up, and was stuck with the loan. The failed deal, known as "burning bed", led to a dramatic slow-down in
leveraged buyouts A leveraged buyout (LBO) is one company's acquisition of another company using a significant amount of borrowed money ( leverage) to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loa ...
. Gibbons Green dissolved and First Boston was forced into the arms of
Credit Suisse Credit Suisse Group AG is a global investment bank and financial services firm founded and based in Switzerland. Headquartered in Zürich, it maintains offices in all major financial centers around the world and is one of the nine global " ...
. In 1990, Ohio Mattress assumed the Sealy name that it had acquired when it purchased Sealy Inc. In 1998 Sealy announced that it was moving from Cleveland to the High Point, North Carolina area.
Bain Capital Bain Capital is an American private investment firm based in Boston. It specializes in private equity, venture capital, credit, public equity, impact investing, life sciences, and real estate. Bain Capital invests across a range of industry se ...
and a team of Sealy's senior executives acquired the company in 1997. In 2004, the company was acquired by
Kohlberg Kravis Roberts KKR & Co. Inc., also known as Kohlberg Kravis Roberts & Co., is an American global investment company that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit, and, through its strate ...
and a team of Sealy management. The deal was valued at $1.5 billion but included significant debt. The company operated as a privately held corporation until 2005. On June 30 of that year, it announced an initial public offering of common stock. The company said proceeds from the IPO would go to paying down debt, funding global operations and paying private equity firm Kohlberg Kravis Roberts to "terminate our future obligations under our management services agreement." In September 2012,
Tempur-Pedic International Tempur-Pedic International, Inc., now part of Tempur Sealy International, is a manufacturer and distributor of mattresses and pillows made from viscoelastic foam. The company is headquartered on the Coldstream Research Campus in Lexington, Ken ...
(TPX) announced an agreement to purchase Sealy (NYSE:ZZ) for about US$229 million. Sealy's corporate headquarters are located in Trinity, North Carolina. Although Sealy's website claims that they are the largest manufacturer of mattresses in the world, Tempur-Pedic had greater revenue than Sealy in 2011. Sealy has 25 U.S. plants and a 17.8 per cent share of the country’s mattress sales. Sealy sells the majority of its mattresses under its three main brands: Sealy Posturepedic, Stearns & Foster, and Bassett.


Overseas markets

There are licensees operating in Australia, Argentina, Bahamas, Colombia, Israel, Jamaica, Japan, New Zealand, South Africa, Thailand and the United Kingdom. *In 1995, direct export business began to South Korea. *In 1996, Sealy began manufacturing and selling in Mexico. *In 2001, Sealy began manufacturing and selling in its brand South Africa. *In 2011, Sealy opened its first manufacturing plant in China. The 100,000-square-foot factory outside Shanghai is a joint venture of Sealy China, which is owned and operated by Sealy Inc., and licensee Sealy Australia.


References


Sealy background information


External links

*
Sealy India Official Website
{{Bain Capital Companies formerly listed on the New York Stock Exchange Manufacturing companies based in North Carolina Manufacturing companies established in 1881 Austin County, Texas Randolph County, North Carolina Private equity portfolio companies Bain Capital companies 1881 establishments in Texas 1997 mergers and acquisitions 2004 mergers and acquisitions 2012 mergers and acquisitions 2005 initial public offerings Mattress retailers of the United States