Newly formed and wholly-owned Fairfax Financial Holdings subsidiary 16133258 Canada Inc. is acquiring all outstanding common shares of specialty sleep retailer Sleep Country Canada Holdings for $35 per share, totalling an enterprise value of about $1.7 billion.
Canadian insurance conglomerate Fairfax serves as a guarantor for the deal.
Christine Magee, chair of the special committee of independent directors at Sleep Country, stated: “We have concluded that this transaction is in the best interests of Sleep Country and is fair to our shareholders.
“Following a comprehensive assessment and our extensive negotiations with Fairfax, we are pleased to have reached an agreement that provides certainty of significant and immediate value to shareholders.”
Stewart Schaefer, Sleep Country president and chief executive, added: “This transaction clearly demonstrates the value and strength of our brands and organization. We look forward to partnering with Fairfax in this new chapter of Sleep Country where we can continue to execute on our strategic initiatives and transform lives by awakening Canadians to the power of sleep.”
Fairfax chair and CEO Prem Watsa, meanwhile, is “thrilled to have Sleep Country and its talented team” come on board the group.
“Sleep Country is Canada’s leading sleep retailer with brands that are recognized by all Canadians,” Watsa declared. “We look forward to working with Stewart and the entire Sleep Country team to further develop this remarkable Canadian success story over the long term.”
The transaction will proceed through a court-approved plan of arrangement under the Canada Business Corporations Act and is anticipated to conclude in the fourth quarter of 2024. It remains subject to shareholder and court approvals, along with regulatory approval under the Competition Act (Canada).
Upon closing, Sleep Country will apply for delisting from the TSX and will no longer be a reporting issuer under Canadian securities laws.
What do you think about this story? Share your thoughts in the comments below.
