The transaction is expected to reduce net debt by approximately $ 400 million
Provides $ 200 million in new capital to increase financial strength and support the acceleration of the business transformation plan
ATLANTA, June 8, 2020 / PRNewswire / – Serta Simmons Bedding, LLC (“SSB” or the “Company”), the largest manufacturer and distributor of mattresses in North America, today entered into a transaction support agreement with majority of its first Senior and second-tier term loan holders to recapitalize the company. The transaction is expected to reduce net debt by approximately $ 400 million and further provide $ 200 million in new capital to increase its financial strength and support the acceleration of SSB’s business transformation plan.
“The agreement with our lenders announced today is further validation of our business and transformation strategy as well as our leadership team,” said David Swift, Chairman and CEO of SSB. “The transaction contemplated in this agreement will add value to our stakeholders and provide the company with increased financial flexibility as we continue to address current macroeconomic challenges, implement our ongoing growth initiatives and deliver to clients. the cutting edge products they expect. SSB. We appreciate our lenders for their support and confidence in our long-term success.
The transaction, once finalized, will modify some existing loan documents to allow the following:
- New tranche of money: $ 200 million in newly funded “first-out” super-senior debt ahead of existing senior term loans.
- Swap tranche: $ 875 million of “second out” super-senior debt before existing senior term loans in exchange for certain existing senior term loans and existing second term loans:
- Swap ratio of $ 74 of new super senior second out debt in exchange for every $ 100 of existing senior term loans; and
- Swap ratio of $ 39 of new super-senior “second exit” debt in exchange for every $ 100 of existing second-term loans.
- An additional basket for super senior “excluded third” debt that would rank ahead of existing senior term loans that can be used for future swaps of existing senior term loans and existing second term loans.
- The use of certain assets for future liquidity improvement and / or liability management operations.
The transaction will be subject to certain closing conditions, including the implementation of the agreed terms in accordance with the final documents.
About Serta Simmons Bedding, LLC
Serta Simmons Bedding, LLC is the leading sleep company and the largest mattress manufacturer, distributor and supplier in North America. Atlanta-based SSB owns and operates the two best-selling bedding brands in the mattress industry: Serta®, which has five other independent licensees, and Beautyrest®. Brands are distributed through national, hotel, regional and independent retail channels across North America. SSB also owns the Simmons® and Tuft & Needle® brands of direct-to-consumer mattresses. SSB operates 28 factories in the United States and Canada. For more information on SSB and its brands, visit www.sertasimmons.com
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Press release prepared by Serta Simmons Bedding LLC and published unedited by BedTimes