CARTHAGE, Mo.—Leggett & Platt Inc. has purchased Elite Comfort Solutions Inc. from Arsenal Capital Partners for $1.25 billion to expand its presence in the specialty foam and hybrid boxed bed market.
A producer of proprietary polyurethane foam technology for the bedding and furniture industries, ECS is based in Newnan, Ga., and has a network of 16 facilities spread across the U.S.
Leggett & Platt, which completed the transaction with private equity firm Arsenal Capital Partners Jan. 16, plans to retain all 16 plants, a company spokeswoman said. A majority of the facilities produce foam and finished products.
ECS' work force of about 950 also will remain with Leggett & Platt, the spokeswoman said, as will the operation's management team.
Leggett & Platt plans to make ECS a separate business unit and operate it within the firm's Residential Products segment. ECS had sales of about $611 million for the fiscal year ending Sept. 30, 2018.
In addition to making specialty foam, ECS develops many of the chemicals and additives used in foam production. It also manufactures finished products—including mattresses sold through traditional and online channels, mattress components, mattress toppers and pillows along with furniture foams—for a diversified customer base, an Arsenal spokesman said.
Prior to the purchase of ECS, Leggett & Platt did not have a presence in the specialty foam sector, the firm's spokeswoman said.
With the acquisition, Leggett & Platt gains "critical capabilities in proprietary foam technology, along with scale in the production of private label mattresses," according to Karl G. Glassman, CEO and president of Leggett & Platt.
He said that the combined expertise of the two companies in spring and foam technology "makes us the leading provider of differentiated products for the global bedding industry and positions us to capitalize on current and future market trends."
Included in those trends are the growth of hybrid spring and specialty foam mattresses, growth of E-commerce mattress sales, increased demand for compressed mattresses sold both online and through traditional channels, and the emergence of numerous compressed mattress brands, Glassman said.
"Together with ECS, we have the capability to supply components or private-label finished goods for nearly any mattress type, packaging foam or distribution channel," he said. "The talented employees at ECS have built a truly exceptional business, and we look forward to working with them to better serve our customers and achieve continued success."
ECS CEO Chris Chrisafides said he was equally happy to lead his company into the Leggett & Platt fold. "Joining forces with Leggett & Platt enables us to provide a wider range of products and services" to the customers of both companies, he said. "We admire Leggett & Platt's storied history, as well as its global footprint and leading product portfolio."
ECS was built to be an innovator in the polyurethane foam and bedding markets, said John Televantos, a partner at Arsenal Capital Partners, a private equity firm.
"We are delighted to see a great permanent home for ECS and its employees," he said. "Leggett & Platt is uniquely capable of continuing and strengthening the path we set for ECS, and we expect that the long history and great value they bring to the bedding industry will be enhanced with the addition."
Leggett & Platt cited a number of other strategic gains made by acquiring ECS, including the addition of more research and development capabilities and proprietary foam technologies, the opportunity to create new paths to growth of hybrid products, and the chance to position the company to grow further internationally and capture a greater share of global market for specialty foam used in bedding than ECS could have achieved on its own.
The company said ECS' technology is a market differentiator and allows the firm to develop unique specialty foam products for individual customers. ECS maintains numerous branded specialty additives designed to enhance foam performance by reducing heat retention, improving durability and improving air flow, it said.
Leggett & Platt said it plans to create new hybrid products utilizing the combined company's specialty foam innovation and spring technologies. It also intends to leverage ECS' core competency in boxed bed innovation, supply chain and production to capitalize on the firm's new and growing sales path.
Founded in 1883, Leggett & Platt is a diversified U.S. manufacturer of bedding components, automotive seat support and lumbar systems, components for home and work furniture, flooring underlayment, adjustable beds, high-carbon drawn steel wire, and bedding industry machinery.