Sleep Number Amends Stalking Horse Deal, Lifting Purchase Price by $114.5M to $529.5M

summarizeSummary

Sleep Number's stalking horse asset purchase agreement has been amended and restated, lifting the base purchase price from $415 million to $529.5 million following a bankruptcy auction. The improved terms include a lower escrow and fewer pre-closing covenants.

check_boxKey Events · M&A and Partnerships · SNBR

• Purchase Price Increased to $529.5M

  The amended and restated asset purchase agreement raises the base purchase price from $415 million to $529.5 million, a $114.5 million increase that reflects the outcome of the bankruptcy auction.

• Escrow Reduced to $10M

  The adjustment escrow amount is reduced from $25 million to $10 million, freeing up more cash for creditors at closing.

• Pre-Closing Covenants Eliminated

  Several pre-closing covenants are removed, including minimum marketing expenditures, a pre-closing inventory count, and a minimum employee acceptance threshold, reducing execution risk.

• New Stub Rent Reserve Required

  A new closing condition requires Sleep Number to fund a segregated Stub Rent Reserve of $5,193,168 for unpaid lease obligations from June 12 to June 30, 2026.

auto_awesomeAnalysis · SNBR · Manufacturing

The amended asset purchase agreement boosts the base purchase price by $114.5 million to $529.5 million, a clear sign of competitive bidding in the bankruptcy auction. Creditors stand to benefit further as the adjustment escrow shrinks from $25 million to $10 million, while the removal of several pre-closing covenants lowers execution risk. A new Stub Rent Reserve of $5.2 million is now required. These revisions materially enhance creditor recoveries and underscore strong buyer commitment, though the transaction still hinges on bankruptcy court approval and other closing conditions.