3Z Brands' acquisition of Southerland raises questions about industry consolidation

In a strategic business move, 3Z Brands has successfully acquired Southerland, a well-established mattress manufacturer with a history dating back to 1893. This acquisition is significant for increasing 3Z's manufacturing capabilities across the United States, enhancing its ability to serve wholesale customers more effectively. The deal allows 3Z to leverage Southerland’s four production facilities located in Nashville, Tennessee; Phoenix, Arizona; Tualatin, Oregon; and Oklahoma City, Oklahoma, which together total over 595,000 square feet. The integration of Southerland's facilities will facilitate better logistics and reduced delivery timelines for e-commerce, catering to a growing demand for quick retail solutions. John Merwin, the CEO of 3Z, expressed enthusiasm for the addition of Southerland to their company. He emphasized that this partnership would not only allow them to reach new wholesale customers from diverse regions but also lower delivery costs. This strategy aims to enhance the overall customer experience by promoting efficiency in operations and expanding product development. Furthermore, Merwin committed to investing in the facilities, including the introduction of advanced equipment and technology, to elevate production capabilities and innovate product offerings over time. On the other side, Bryan Smith, the President of Southerland, highlighted the excitement of merging with a reputable name like 3Z Brands that shares a commitment to quality and customer service. The synergy between the two companies is expected to strengthen their market position, providing Southerland with access to additional resources and expertise. Smith noted that this integration would enhance their production capabilities, align better with retail demands, and improve service quality for existing customers. The partnership is positioned as mutually beneficial, allowing both companies to thrive in a competitive landscape. The acquisition process involved several financial advisors; Southerland was represented by Mann, Armistead & Epperson, Inc., and 3Z was advised by RBC Capital Markets LLC. This acquisition is a clear indication of the ongoing consolidation trend within the mattress manufacturing sector, demonstrating how companies are attempting to optimize their operational efficiencies and meet the growing needs of their customer base.