Lexington, Kentucky-based Tempur Sealy International Inc. is exiting its involvement in innerspring manufacturing in the United States and is selling three wire production facilities, equipment and associated working capital to industry supplier Leggett & Platt for approximately $48 million, according to a July 1 news release issued by both companies.
The two companies also announced today that Carthage, Missouri-based L&P will become the exclusive supplier of innerspring and box-spring units to Tempur Sealy in the United States and Canada.
Other financial arrangements were not disclosed, nor is it known whether L&P will continue to operate the three innerspring plants.
“We are very pleased to become a long-term provider of components to Tempur Sealy, and we look forward to the expanded strategic partnership,” said David Haffner, L&P board chair and chief executive officer. “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. We expect this agreement to add approximately 2% to sales, and be neutral to EPS over the first year as we execute the integration plan.”
