Mattress Firm Holding Corp. agreed to buy rival Sleep Train Inc. for $425 million, bolstering the specialty-bedding retailer’s reach on the U.S. West Coast.

The acquisition will be funded with cash and debt, according to a statement today. Mattress Firm also will assume an additional $15 million in closely held Sleep Train’s liabilities. Shares of Mattress Firm, which has more than 1,500 company-operated and franchised stores in 36 states, jumped as much as 14 percent.

The purchase gives Houston-based Mattress Firm more than 310 retail locations on the West Coast in markets such as California, Washington and Oregon. The deal continues consolidation in the bedding industry: last year Tempur-Pedic International Inc. bought Sealy Corp. for about $229 million, uniting the two biggest publicly traded mattress companies.

“It’s a very good deal for Mattress Firm,” Joshua Borstein, an analyst at Longbow Research LLC, said in an interview. “It gives them an immediate gateway into the West Coast, one of the major geographies that Mattress Firm didn’t have a presence in. They’ll use this acquisition as a springboard.”

Borstein, who is based in Independence, Ohio, has a buy rating on Mattress Firm.

The shares surged 11 percent to $63.13 at 11:38 a.m. in New York. They had gained 32 percent this year through yesterday.

Today’s transaction has been approved by the boards of both companies. Mattress Firm estimates the deal will bring about $20 million in annual cost savings by 2017. Before one-time costs, the deal will boost earnings per share at Mattress Firm in the mid-single digit percentage range.

Sleep Train posted sales of $471 million in fiscal 2013, according to the statement, which cited Furniture Today.

Mattress Firm was already “the No. 1 retailer, now this makes them twice as big as the No. 2,” Borstein said.

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