April 5, 2010, 12:00 AM

Tempur-Pedic takes its Canadian operation in-house

The bedding maker and direct marketer is bolstering its business base in Canada with the acquisition of one of its key distributors.

Bedding maker and direct marketer Tempur-Pedic International Inc. is bolstering its business base in Canada with the acquisition of one of its key distributors.

Tempur-Pedic International, No. 206 in the Internet Retailer Top 500 Guide, has acquired Tempur Canada Inc. for an undisclosed price.

Previously, Tempur Canada, which generated annual sales of C$9.0 million ($8.97 million), was operated through an independent distributor, which Tempur-Peduc did not identify. Key parts of the transaction were handled by Dan-Foam ApS, a Danish subsidiary which markets and distributes Tempur-Pedic products in a number of foreign countries.

"Prior to the acquisition, Canada was the largest bedding market where we were represented by a third-party distributor, but the Canadian market is large and our share is relatively low,” says Tempur-Pedic CEO Mark Sarvary. “We are committed to growing Canadian market share, and so we will increase our investments in advertising and sales initiatives which over time we believe will drive significant sales and earnings growth."

Tempur-Pedic is acquiring Tempur Canada at a time when the company is pushing to revitalize its international sales. In 2009, about 37.0%-$307.5 million-of Tempur-Pedic’s total revenue of $831.2 million, was generated overseas, compared with 39.0%- $361.5 million-of total sales of $927.8 million in 2008. "We are pleased with the results we have experienced in driving sales growth and improved profitability from recently acquired markets,” says Sarvary. “In 2010, we expect the Canadian acquisition will be modestly accretive to earnings."

In 2009, Tempur-Pedic reported:

  • A decrease in total revenue of 10.4% to $831.2 million from $927.8 million in 2008.
  • Direct sales, which include catalog and web, increased 4.0% to $49.5 million from $47.6 million in 2009.
  • Net income increased 44.3% to $85.0 million from $58.9 million in 2008.

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