Atlanta, Georgia - Simmons Co. and its subsidiary, Simmons Bedding Co. have confirmed a restructuring plan under which Simmons Bedding and all subsidiaries, as well as parent company Bedding Holdo Inc, will be acquired by affiliates of Ares Management llc and Teachers' Private Capital, a private investment arm of the Ontario Teachers' Pension Plan, for around $760 million.
A 25 Sept statement from Simmons said the transaction will reduce the bedding manufacturer's debt from $1000 million to around $450 million, giving it a "stronger balance sheet and increased financial flexibility."
Simmons said it intends to commence Chapter 11 proceedings under the US Bankruptcy Code and seek confirmation of the pre-packaged plan. The company noted that although its subsidiaries in Canada and Puerto Rico will not be included in the bankruptcy filings, they will be acquired under terms of the purchase agreement.
"Simmons Bedding is firmly positioned as an industry leader and under this plan will retain its own identity and operational structure, have a newly strengthened balance sheet, and will remain committed to bringing innovative products to our customers," said Simmons Bedding ceo, Stephen Fendrich. "I am extremely pleased that the plan protects our employees and provides for our senior lenders and suppliers to be paid in full," he added.
Ares and Teachers' Private Capital also own National Bedding Co., the largest manufacturer of bedding under the Serta brand name in North America, but intend to operate Simmons and Serta as "separate and distinct entities" which will retain their corporate and brand identities, product lines and management teams, the statement said.
"As long-term investors, we seek companies with proven talent throughout the organisation and a strong franchise," said senior vice-president of Teachers' Private Capital Erol Uzumeri. "Simmons' historical performance is excellent when measured against against our core investment criteria and we are confident this investment will deliver sustainable value," he added.
The transaction is subject to customary terms and conditions and confirmation of the plan from the Bankruptcy Court. (RD)