Sleep Country Canada Holdings Inc revealed that it plans to acquire all the Canadian assets of US mattress-in-a-box company Casper Sleep Inc for US$20.6 million.
“We are very excited to acquire 100% of Casper's Canadian retail business, who invested over $1 billion globally to build a leading brand that elevated the importance of a good night's sleep for all,” Sleep Country CEO Stewart Schaefer said in a statement.
“With their omnichannel business, and their mission to deliver a frictionless and elevated sleep retail experience, they align perfectly with our strategic omnichannel journey that began four years ago," he added.
Toronto-based Sleep Country said it will pay US$20.6 million at close, receive a cumulative US$4.5 million marketing transition fee from Casper Sleep over the next four years and receive three-year warrants which would convert into an approximately 1% stake in Casper Sleep on exercise.
In addition, Sleep Country invested US$20 million in five-year convertible notes which will have the option of converting into approximately 5% of Casper Sleep's shares.
"We are thrilled to expand upon our retail journey by partnering up with one of North America's top sleep retailers," said Emilie Arel, CEO of Casper Sleep.
The Casper Sleep deal comes as the number of e-commerce companies selling compressed and rolled mattresses in boxes that ship directly to customers has rocketed in recent years.
Sleep country has omnichannel and ecommerce operations including 290 corporate-owned stores and 20 warehouses across Canada.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
Follow her on Twitter: @UttaraProactive