Updated Mar 13, 2024 - Business

Scoop: Quiet juggernaut Ashley Furniture makes $1B acquisition

Illustration of a pillow in the shape of a hundred dollar bill on a bedspread

Illustration: Sarah Grillo/Axios

Ashley Home Furnishings last week announced an acquisition of Resident Home, an Indiana mattress maker that primarily sells via direct digital marketing.

The big picture: Few media outlets picked up on it, likely because Ashley neglected to mention that it paid nearly $1 billion.

Details: The deal was financed via around $680 million in cash and a $300 million seller note, per multiple sources.

  • That's a king-sized payday for Resident's venture backers, including Ion Crossover Partners, Nexus Capital Management, Baron Capital, Data Point Capital, Eastward Capital Partners, and Glynn Capital.
  • The company raised less than $10 million between its 2017 founding and 2021, when it raised $130 million.

Zoom out: Ashley is a quiet juggernaut. It claims to be North America's largest furniture store brand, while its parent company is the world's largest furniture maker with over 35,000 employees in 155 countries.

Look ahead: That parent company is privately-held, led by a father-and-son team in Wisconsin, but the Resident acquisition could give it some exposure to the public markets.

  • Ashley itself won't list, but a source says the plan for Resident is to help it expand its product line via acquisition and then spin Resident out via IPO.
  • A different source adds that Resident, prior to acquisition, was profitable with around $900 million in 2023 revenue and 10% EBITDA margins.

Neither Ashley nor Resident responded to interview requests.

The bottom line: Not all mattress deals end up burning investors.

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