-- Somnigroup International (SGI) on Monday agreed to acquire bedding and furniture components maker Leggett & Platt (LEG) in an all-stock deal worth about $2.5 billion.
Shareholders of Leggett & Platt will receive 0.1455 shares of Somnigroup for each share they own in the company, the firms said in a joint statement. Leggett & Platt investors will own about 9% of the combined company.
Leggett & Platt's stock jumped nearly 9% in the most recent premarket activity, while Somnigroup declined 1.7%.
"Leggett & Platt's strong engineering capabilities, diversified end users and cash-generating financial profile meaningfully enhance our global platform," Somnigroup Chief Executive Scott Thompson said in the statement. Somnigroup anticipates the acquisition to expand its addressable markets in bedding and provide access to non-bedding industries.
The transaction, which requires approval from Leggett & Platt's shareholders and clearance from regulators, is expected to complete by the end of the year. Following completion, Leggett & Platt will operate as a separate business unit within Somnigroup and maintain its offices in Carthage, Missouri.
"This transaction provides Leggett & Platt shareholders with the opportunity to participate in the future growth and value creation of a leading global company on a tax deferred basis," Leggett & Platt CEO Karl Glassman said. Glassman will continue to lead Leggett & Platt after the deal closes and will assist with a transition to a new CEO of the business unit within 12 months of completion.
The combined company is expected to operate 175 manufacturing facilities across 36 countries, with a global workforce of more than 36,000 employees.
Somnigroup and Leggett & Platt estimate the deal to be accretive to adjusted earnings on a per-share basis before synergies in the first year after completion. The companies also expect a positive impact of $50 million on adjusted earnings before interest, taxes, depreciation, and amortization on an annual run-rate basis.
In February, Leggett & Platt reported adjusted EPS of $0.22 for the fourth quarter, up from $0.21 the year before. Sales dropped 11% on a yearly basis to $938.6 million. At the time, the company said it expected adjusted EPS to be in between $1 and $1.20 and sales to be in a range of $3.8 billion to $4 billion for 2026.