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Tempur Sealy International Inc. Message Board

  • analyst112 analyst112 Jan 18, 2013 12:35 PM Flag

    ZZ acquistion hurts eps

    Sealy is making $80MM and paying $85MM in interest, so just breaking even. TPX will lose $30MM proforma on Sealy as it assumes all their debt and adds $20MM of new interest from the recent note issue. That is just in OE, Eps will be much worse as they amortize $700MM of new goodwill. They better have big plans for Sealy as e.p.s. will definitely be hard it in next 3 quarters. TPX estimates will come down for 2013 and that cannot be good for the stock. The sales environment is also poor and will not improve until 2014. If we get an economic downturn, TPX will be trashed big time. In any case it is a lot riskier than before with $1.2B on new debt. They paid too much for Sealy. This may work out in the long run, but owning TPX is very high risk in 2013.

    Sentiment: Sell

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    • Sorry, I tried to hit THUMBS UP! I agree 100% Competition is killing them alone.I was just looking at Jerome's in San Diego Calif. They have copied every bed that TPX has and is doing it at 1/5 of the cost. Nobody's dropping 8k-12k on a bed in this economy IMHO!

      Sentiment: Strong Sell

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