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Sleepyhead Announces Major Australian Acquisition

Media Release
November 1, 2010

Sleepyhead Announces Major Australian Acquisition

Iconic New Zealand bed manufacturer Sleepyhead has today announced a major acquisition of two Pacific Brands business units in Australia as part of Sleepyhead’s expansion in the highly competitive Australian bed manufacturing market.

The deal, which is subject to ACCC ratification, sees Sleepyhead buying the Sleepmaker bedding business, including the Simmons and Dunlopillo brands and flexible foam manufacturer, Dunlop Foams. These manufacturing operations will be added to the company’s existing businesses in Australia which include the Sleepyhead, Wonderest, Latex Gold, Design Mobel and Serta brands. As part of the transaction, Sleepyhead will sell its Wonderlay carpet underlay business to Pacific Brands.

The move announced this morning to the ASX, comes just weeks after the family-owned kiwi bed maker celebrated its 75th anniversary in New Zealand and announced that its focus was on expansion in the Australian market where it has made beds since 1996.

Sleepyhead’s Joint Managing Directors Graeme and Craig Turner say Australia is a key market for the company as it looks to boost production and build Sleepyhead into a global brand. “We are the leading bedding brand in New Zealand and we want to replicate that success in Australia. We’ve steadily built our manufacturing base and market share in the highly competitive Australian market over the past decade and this acquisition is the next step in our plans for expansion.”

“Sleepyhead is a highly competitive company and we’ve been working for the past 18 months to identify a key strategic acquisition that will provide the size and scale that we
believe will enable us to reach our goal over time of becoming the leading bed maker in the Australian market.”

The Turners say the move is a good outcome for the Pacific Brands businesses with Sleepyhead’s focus on locally based manufacturing to supply local markets. “We are an on-shore manufacturer passionate about keeping manufacturing skills and jobs in Australia and New Zealand. All products used at our local factories around Australia and New Zealand are locally supplied and made and we offer a 100% local product for Australian and New Zealand customers.”

“Sleepyhead is at the forefront of mattress manufacturing and innovation and adding its world-class expertise and experience to the brands and distribution of the Pacific Brands’ businesses will be a tremendous fit for employees, customers and suppliers.”

“Sleepyhead has a history of making a valuable contribution to the local economies in New Zealand and Australia where it operates. We have been unwavering in building and maintaining a highly skilled and robust local manufacturing capability in Australasia to supply each domestic market.”

Sleepyhead has a history of purchasing physical assets and investing in manufacturing and new technologies. The company is committed to this strategy in Australia and New Zealand to ensure it builds and maintains a strong local manufacturing skill base and retains its competitive position in the worldwide market.

In December Sleepyhead will open Australasia’s largest and most advanced bed-manufacturing factory in Melbourne to double existing production. The $35 million plant will produce the company’s unique environmentally friendly foam that it has pioneered at its New Zealand headquarters in Otahuhu.

Sleepyhead is a privately owned family business established by the Turner family in Auckland 75 years ago. The company currently operates six manufacturing facilities across Australia and New Zealand.

The acquisition of the Pacific Brands assets is subject to ACCC ratification.

Sleepyhead Key Facts:
• Largest privately owned mattress, foam and carpet underlay manufacturer in Australasia
• Owned by the Turner family since 1935
• Five manufacturing and support facilities across New Zealand and Australia - Auckland, Christchurch (which is the only latex manufacturing plant in Australasia), Brisbane, Melbourne and Perth.
• Sleepyhead New Zealand made approximately 300,000 pieces in the past year. 160,000 were made by Sleepyhead Australia.
• Sleepyhead has a 98% brand recall amongst New Zealanders.

About Dunlop Foams
Dunlop Foams is Australia’s leading manufacturer, converter and distributor of flexible slabstock foam. Dunlop Foams has production and converting facilities in all states of Australia, supplying customers in the bedding, furniture and other industries. Its products are sold under brands such as Enduro, Luxura, Opulence, Stamina, Marathon, Hypersoft, Viscoflext, and ViscoLux.

About Sleepmaker
Sleepmaker is one of Australia’s leading bedding manufacturers with manufacturing facilities in all states of Australia except for South Australia. Sleepmaker supplies beds to retail and commercial customers under brands such as Sleepmaker, Dunlopillo and Simmons.

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