Details on Sealy emerge as bank meeting nears

By Sara Rosenberg

New York, March 16 - Size, structure, price talk and specific timing details surfaced on Tuesday on Sealy Corp.'s proposed $685 million credit facility, which is set to launch via a bank meeting on Thursday at 10 am EST, according to a market source. JPMorgan and Goldman Sachs are the lead banks on the deal.

The facility is expected to consist of a $125 million six-year revolver with an interest rate of Libor plus 250 basis points and a $560 million eight-year term loan with an interest rate of Libor plus 275 basis points, the source said.

Sealy's bank meeting was expected to take place this week, but previously timing was fluid with the syndicate looking at either Thursday or Friday for a launch.

Proceeds will be used to help fund Kohlberg Kravis Roberts & Co.'s approximately $1.5 billion acquisition of Sealy.

The company also plans to use equity to support the transaction, according to a company news release.

Furthermore, substantially all of the Trinity, N.C., bedding manufacturer's existing debt will be refinanced in connection with the transaction.

Under the acquisition agreement, KKR and Sealy management will acquire about 92% of Sealy, with existing shareholders retaining the remaining 8% interest. Sealy is being acquired from a private investment group that includes Bain Capital, Charlesbank Capital Partners, JPMorgan Partners, CIBC Argosy Merchant Fund and BancBoston Capital.

Goldman, Sachs & Co. and J.P. Morgan Securities Inc. served as financial advisers to Sealy. Kirkland & Ellis LLP advised the selling Sealy shareholders, and Simpson Thacher & Bartlett LLP advised KKR.

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