Purple Innovation expands relationship with Somnigroup

Purple Innovation (PRPL) announced that it has entered into an agreement with Somnigroup International (SGI) to significantly expand their commercial relationship. Under the terms of the agreement, Purple will materially increase its presence in Mattress Firm stores nationwide. Purple also executed a strategic supply agreement with Tempur Sherwood, a subsidiary of Tempur Sealy, further aligning Purple with the world’s largest bedding company and delivering meaningful value to both companies’ stakeholders. Mattress Firm will expand its showcasing of Purple products across its national store network from approximately 5,000 Purple mattress slots to a minimum of 12,000 Purple mattress slots. Sherwood will have the exclusive right to assemble certain product lines that Purple sells to Mattress Firm, while Purple will continue to manufacture its GelFlex Grid technology and retain all related Intellectual Property. Purple will grant Somnigroup a combined 8M equity warrants at a strike price of $1.50. Sherwood, the private label bedding manufacturer business unit of Somnigroup, will have the exclusive right to assemble certain product lines that Purple sells to Mattress Firm, while Purple will continue to manufacture its GelFlex Grid technology and retain all related Intellectual Property. Purple also announced that it has received an incremental $20.0 million from existing lenders pursuant to an amendment to its existing credit agreement, bringing the total principal commitment to $100.0 million. The new financing will support Purple’s continued investments in product innovation and advertising. As with the existing term loan, the increased amount includes the ability to PIK interest. In connection with the incremental borrowings, Purple issued to the lenders approximately 6.6 million equity warrants at a strike price of $1.50 and a term of approximately 10 years.