Hillhouse Investment acquires Serta, King Koil licensing company in China

HONG KONG – Asia-focused private equity company Hillhouse Investment Management has acquired controlling interest in AI Dream, the licensee company that operates both the Serta and King Koil brands in China, from Advent International.

Financial terms of the transaction were not disclosed.

Hong Kong-based Hillhouse is an investment company that holds some of the biggest endowments and pensions across the United States, Europe and Canada. Earlier this year, the company raised $18 billion to back three new funds.

“We believe that China’s mattress market continues to have tremendous growth potential, propelled by a new generation of a more health-conscious middle class and increasing demand for high quality sleep products,” said Wei Cao, partner of Hillhouse Group. “By leveraging our expertise in supply chain management and digital enablement and transformations, we look forward to working with Al Dream’s experienced management team to enhance the company’s core competencies and the future growth of its premium, globally recognized sleep solution brands.”

Formed in 2018 through the merger of Serta and King Koil in China, AI Dream sells mattresses, bed frames, adjustable bed bases and pillows. AI Dream combined two sleep brands with operations in Hong Kong and mainland China. The company acquired the China license of Germany’s sleep system brand, Ruf Betten, in 2019.

“After becoming an integrated business through the combination of Serta and King Koil, which themselves enjoy a strong presence in more than 100 countries, AI Dream has continued to go from strength to strength and is now one of the largest players in China’s premium mattress market,” said Andrew Li, managing director and head of greater China of Advent International. “We have found an ideal partner in Hillhouse, which has the expertise and track record to create lasting value and support to AI Dream in its next phase of growth.”

During the past three years, Advent said it has grown AI Dream from a single-branded to a multi-brand platform and expanded its outlets from 300 to more than 2,300 branded stores in more than 600 cities in China and Hong Kong. In addition to the retail expansion, the private equity firm invested in product development and new branding.

“The Serta brand has had terrific growth in China since we entered the market in 1998 and has become among our top three largest markets in the world,” David Swift, chairman and CEO of Atlanta-based Serta Simmons Bedding. “We look forward to continuing the licensing relationship with AI Dream under Hillhouse’s new ownership and to partnering with them to drive the continued growth of the Serta business in China.”

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