Shares of Mattress Firm Holding Corp (NASDAQ:MFRM) are up big today following last evening’s announcement that they will be acquiring one of their competitors, Sleepy’s, in what should be a $780 million deal.
The company expects to complete the acquisition by February of next year, and says that it will add around $1 billion in annual sales to their top line.
Typically, when an acquisition is made, a company’s shares drop, but investors seem to be very happy about this deal with shares up significantly in early morning trading. The stock is up 8.91% or $4.4 after the positive news, hitting $53.76 per share. About 60,902 shares traded hands. MFRM has declined 18.74% since April 28, 2015 and is downtrending. It has underperformed by 17.11% the S&P500.
Out of 4 analysts covering Mattress Firm Holding Corp (NASDAQ:MFRM), 2 rate it “Buy”, 0 “Sell”, while 2 “Hold”. This means 50% are positive. $60 is the highest target while $47 is the lowest. The $53.50 average target is -0.48% below today’s ($53.76) stock price. Mattress Firm Holding Corp was the topic in 6 analyst reports since August 14, 2015 according to StockzIntelligence Inc. Citigroup maintained the stock on September 14 with “Buy” rating. UBS maintained the shares of MFRM in a report on September 14 with “Buy” rating. Finally, Zacks upgraded the stock to “Sell” rating in an August 14 report.
The institutional sentiment increased to 2.44 in Q2 2015. Its up 1.12, from 1.32 in 2015Q1. The ratio increased, as 19 funds sold all Mattress Firm Holding Corp shares owned while 13 reduced positions. 20 funds bought stakes while 58 increased positions. They now own 26.67 million shares or 14.80% more from 23.24 million shares in 2015Q1.
Echinus Advisors Llc holds 11.4% of its portfolio in Mattress Firm Holding Corp for 498,193 shares. 40 North Management Llc owns 2.59 million shares or 8.93% of their US portfolio. Moreover, Stockbridge Partners Llc has 7.7% invested in the company for 2.36 million shares. The New Jersey-based Pennant Capital Management Llc has invested 3.1% in the stock. Buckingham Capital Management Inc, a New York-based fund reported 448,723 shares.
Since March 25, 2015, the stock had 1 insider buy, and 6 insider sales for $1.45 million net activity. Stagner R. Stephen sold 2,687 shares worth $113,466. Weiss Alexander bought 5,000 shares worth $226,739. Tinsey Iii Frederick C. sold 4,300 shares worth $262,746. Fiorentino David A sold 6,000 shares worth $411,041. The insider Childs John W sold 1.50M shares worth $99.71 million.
Mattress Firm Holding Corp. is a holding company. The company has a market cap of $1.95 billion. The Company, through its direct and indirect subsidiaries, is a retailer of mattresses and bedding-related products in various metropolitan markets in the United States through company-operated and franchise-owned mattress specialty stores that operate primarily under the name Mattress Firm. It has 38.14 P/E ratio. The Firm operates through two reportable divisions: retail activities and franchise operations.