Corsicana Bedding Inc., a major producer of promotional and moderately priced mattresses, has inked a deal with New York-based private equity firm Fenway Partners, giving Fenway a majority stake in the family-owned company. The value of the transaction, which is set to close Oct. 15, was not disclosed.
Principal sellers are Carroll Moran, chief executive officer of the Corsicana, Texas-based bed maker, who holds a controlling interest, and his mother Gail Moran, who established the business with her husband in 1971.
“The timing felt right, especially when it became clear that neither of my daughters was interested in coming into the business,” Carroll Moran said in discussing motivations for the sale. “We had tremendous interest from buyers (because) the company is in good shape, the business model is strong.
The Moran family retains a 20% share of the business and key management are to remain in place, including Moran as CEO and board member, Chad Grant as president and Kim Cobb as chief financial officer.
“There were many who didn’t like the $499-and-down (market segment), but we were fine with who we were and what we did,” Moran added. “We carved that little niche out.”
And it has been a profitable one, he said. Annual sales are $350 million. Corsicana’s business stands apart in another way; most sales are, and always have been, cash-on-delivery. Until December, deliveries were made by the company’s large truck fleet. The fleet was sold and the company now outsources transportation to J.B. Hunt.
Since 2008, Corsicana had been in acquisition mode, purchasing plants and mattress licenses. Recently, the company closed two of the plants associated with its newer, brand-name bedding company Sleep Inc., which was folded back into Corsicana.
In 2010, the company established national distribution with the opening of a Washington state plant. Corsicana currently has manufacturing in eight other states—Alabama, Arizona, Florida, Illinois, North Carolina, Pennsylvania, Tennessee and Texas.
Mrs. Moran at 67 is retired; her husband passed away in 1990. Carroll, their only child, grew up in the family business, eventually dropping out of college to manage company sales. It was 1983 and he was 19.
“I think when any company gets to a certain size, it’s time to make larger deals and plan strategically into the future,” Moran said. “I’ve been successful through the years and made some smart acquisitions, but now I’m excited about where this company can go.”
Fenway Partners is not new to the mattress industry. In 1998, it acquired manufacturer Simmons Bedding Co. for about $500 million, and sold it in 2003 to Thomas H. Lee Partners for more than $1 billion. In 2000, Fenway purchased mattress retailer Sleep Country USA, which in 2006 was sold to Sleep Train Inc.
This story was updated Sept. 29, 2014.
