Sleep Number Corporation disclosed in a July 23 regulatory filing that it has entered into an amended and restated asset purchase agreement with SNBR, Inc., a subsidiary of Sleep Country Canada Inc., raising the base cash purchase price for substantially all of its assets from $415 million to $529.5 million. The revised agreement, dated July 18, 2026, replaces the original stalking horse agreement the company entered into on June 12, 2026, and reflects the outcome of a Bankruptcy Court-supervised auction process.
The amended terms provide a meaningfully higher recovery for the debtor's estate. Beyond the $114.5 million increase in the base purchase price, the agreement reduces the adjustment escrow deposit required from the buyer to $10 million from $25 million and eliminates several potential purchase price deductions that were present in the original deal. Those removed deductions include adjustments related to undelivered customer orders, payment card processor reserve deposits, and cure costs payable to counterparties for assumed contracts and leases.
Several pre-closing requirements that had been imposed on Sleep Number under the stalking horse agreement have also been eliminated. The company will no longer be bound by a covenant to maintain minimum marketing expenditures before the closing, a requirement for a pre-closing inventory count, or conditions tied to a minimum employee acceptance threshold and the acceptance of employment by a specified percentage of designated executives.
A new closing condition in the amended agreement requires Sleep Number to fund a segregated "Stub Rent Reserve" of approximately $5.2 million. This reserve covers unpaid lease obligations for the period from June 12, 2026 through June 30, 2026, in accordance with the approved budget.
The transaction remains subject to standard conditions for a bankruptcy asset sale. These include Bankruptcy Court approval of the sale, the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and the absence of any governmental order or proceeding seeking to block the transaction. The buyer's obligation to close is also conditioned on Sleep Number not having experienced a material adverse effect. The agreement includes provisions for a break-up fee and expense reimbursement payable to the buyer, as well as potential forfeiture of a deposit to the company, each triggered by specified events.
Sleep Number, which previously disclosed its entry into bankruptcy proceedings, is selling its assets through this court-approved process. The amended agreement with Sleep Country Canada represents the leading bid that emerged from the auction, and the company will now seek the Bankruptcy Court's authorization to proceed with the sale on these revised terms.