The online retailer Amazon.com Inc. AAM1, +0.16% said Tuesday it has bought mattress and pillow maker Mattress Firm LLC for $2.9 bn in cash and stock, bringing its total investments in the mattress industry to $5.7 bn.
Amazon’s purchase will increase its stake in the company to 15% from 7%, according to the company.
Mattress Firm was founded in 2012 by two college students from Massachusetts who were looking for a new way to sleep.
It sells the mattresses under several brands, including TLC, a subsidiary of American Beauty International Inc. ABHI, +1.46% which owns the mattress brand Sleepy Cuddles, and Zephyr, a brand owned by Lulu LLC, which owns Zephyrus mattress brand.
Amazon said the purchase gives it a 30% stake in Mattress firm, as well as additional investments in mattress products.
The purchase will make Mattress firmer than it has been in the past, Amazon said.
In its annual results, the company reported that it has made $965 million in sales from Mattress, an increase of 9% from 2014.
Amazon has been aggressively growing its mattress business, but its growth is slowing.
Its growth rate dropped to 6.6% in 2015, down from 8.6%, and it has struggled to match the rapid growth of other retailers such as Walmart and Target Corp. TGT, +2.06% Last year, it sold $7.8 billion worth of mattresses.
Amazon said it is also making other acquisitions to diversify its mattress portfolio.