After receiving a takeover bid, Purple Innovation Inc. (NASDAQ: PRPL) shares increased 42.38% to trade at $3.97 in current market trading. At the end of the previous session, PRPL closed at $2.79.
Who is the bidder for PRPL?
In a statement released today, Purple Innovation (PRPL) confirmed that Coliseum Capital Management, LLC sent it an unsolicited, non-binding proposal on September 17, 2022. A bid of $4.35 per share was made to acquire all of PRPL’s outstanding capital stock. To determine the best course of action for Purple and all Purple shareholders, the PRPL Board of Directors will carefully review the proposal.
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An Acquisition Move
Earlier this month, Purple Innovation itself acquired Intellibed, a leading sleep health and wellness company.
- A combination of PRPL’s premium mattress range and Gel Grid technology under one brand will extend PRPL’s premium mattress range into the luxury category.
- PRPL was the only publicly traded brand to see an increase in consumer interest over the past year in a recent study.
- As a long-term licensee of PRPL’s gel technologies, Intellibed is a perfect fit for PRPL. Aside from consolidating its intellectual property under one roof, PRPL is now able to truly capitalize on the increase in consumer interest and demand for Gel Grid technology.
- PRPL has also been able to accelerate its product development schedule by several years, allowing it to address the premium, higher-margin segment of the sleep and wellness sector immediately.
- Keybanc reported that PRPL was the only publicly traded brand to see a year-over-year increase in consumer interest.
- Consumers, who are increasingly moving away from coils, are most likely to convert to Gel Grid technology.
- PRPL will integrate Intellibed’s family of brands into Purple’s luxury product line under the terms of the acquisition, leveraging Purple’s significant brand power and creating a product range from premium mattresses starting at $1,399 to luxury mattresses over $7,000 per mattress.
What is the significance of that acquisition?
For the trade, this means higher margins and more revenue, and a wider range of choices for consumers. As a result of the acquisition, Purple Innovations (PRPL) has strengthened its position as the leader in the Gel Grid category, and the category’s growth continues to accelerate. In addition to retaining Intellibed employees, Purple plans to integrate its operations into the company in order to improve customer and consumer experiences, improve manufacturing and distribution efficiency, enable growth, and gain scale benefits.
