Sealy (formerly the Sealy Corporation) is an American brand of
mattress
A mattress is a large, usually rectangular pad for supporting a person Lying (position), lying down, especially for sleeping. It is designed to be used as a bed, or on a bed frame as part of a bed. Mattresses may consist of a Quilting, quilted o ...
es marketed and sold by
Tempur Sealy International
Somnigroup International Inc. is an American manufacturer of mattresses and bedding products.
The company was formed when Tempur-Pedic International, a manufacturer of memory foam mattresses, acquired its biggest competitor Sealy Corporation ...
. 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 List of cities in Texas by population, most populous city in the U.S. state of Texas and in the Southern United States. Located in Southeast Texas near Galveston Bay and the Gulf of Mexico, it is the county seat, seat of ...
. 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 sufficiency of disclosure, enabling discl ...
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 (American English) or licence ( Commonwealth English) 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 par ...
-expansion similar to that of
Coca-Cola
Coca-Cola, or Coke, is a cola soft drink manufactured by the Coca-Cola Company. In 2013, Coke products were sold in over 200 countries and territories worldwide, with consumers drinking more than 1.8 billion company beverage servings ...
. 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 was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...
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 deb ...
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 the acquisition of a company using a significant proportion of borrowed money (Leverage (finance), leverage) to fund the acquisition with the remainder of the purchase price funded with private equity. The assets of t ...
, a deal which netted Sealy shareholders US$965m.
First Boston
: ''For the company after its acquisition by Credit Suisse, see Credit Suisse First Boston (known as CSFB and CS First Boston)''
The First Boston Corporation was a New York–based bulge bracket investment bank, founded in 1932 and acquired by ...
made a bridge loan to the buy-out firm just as
Drexel Burnham Lambert
Drexel Burnham Lambert Inc. 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, i ...
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 eve ...
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 the acquisition of a company using a significant proportion of borrowed money ( leverage) to fund the acquisition with the remainder of the purchase price funded with private equity. The assets of the acquired company ...
. Gibbons Green dissolved and
First Boston
: ''For the company after its acquisition by Credit Suisse, see Credit Suisse First Boston (known as CSFB and CS First Boston)''
The First Boston Corporation was a New York–based bulge bracket investment bank, founded in 1932 and acquired by ...
was forced into the arms of
Credit Suisse
Credit Suisse Group AG (, ) was a global Investment banking, investment bank and financial services firm founded and based in Switzerland. According to UBS, eventually Credit Suisse was to be fully integrated into UBS. While the integration ...
.
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, LP is an American Investment company, private investment firm based in Boston, Massachusetts, Boston, Massachusetts, with around $185 billion of assets under management. It specializes in private equity, venture capital, credit, p ...
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 private-equity and investment company. , the firm had completed private-equity investments in portfolio companies with approximately $710 billion of total ...
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 (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 percent 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
Kohlberg Kravis Roberts companies