Tempur-Pedic International (NYSE: TPX) announced today that it will be buying 100% of the outstanding stock in rival mattress maker Sealy (NYSE: ZZ) for $2.20 per share. That's a 2..8% premium to Sealy's closing price of $2.14 per share on Wednesday but, according to the companies, a premium of about 23% to Sealy's 30-day average closing price on Wednesday.

Tempur-Pedic will also assume or repay all of Sealy's outstanding debt and the deal, which is expected to close in the first half of 2013, is valued at $1.3 billion. The companies will continue to operate independently.

Shares in the Lexington, Ky.-based Tempur-Pedic skyrocketed in morning trading, up more than 15% at one point, as investors seemed to like the deal. Trinity, N.C.-based Sealy has roots dating back to 1881. Tempur-Pedic was founded in 1992. The combined company will be a $2.7 billion global bedding provider with a presence in more than 80 countries, according to the press release. Sealy had sales of $1.2 billion in fiscal 2011.

The companies believe a complementary product mix, great brands, and synergies will all contribute to shareholder value.

Tempur-Pedic will finance the acquisition through debt.

Fool contributor John Divine owns no shares in any of the above companies. You can follow him on Twitter @divinebizkid and on Motley Fool CAPS @TMFDivine.

The Motley Fool owns shares of Tempur-Pedic International. The Motley Fool has a disclosure policy.
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