Serta enters agreement with majority lenders to recapitalize

By Wendy Van Sickle

Columbus, Ohio, June 8 – Serta Simmons Bedding entered into a transaction support agreement with a majority of its first-lien and second-lien term loan holders to recapitalize the company, according to a news release issued Monday.

The transaction is expected to reduce net debt by about $400 million and provides for $200 million in new capital via a newly funded super-priority loan.

The transaction also provides for $875 million of super-priority “second out” debt in exchange for existing first-lien and second-lien loans at an exchange ratio of $74 of new loans and $39 of new loans for existing first-lien and second-lien loans, respectively.

An additional basket for super-priority “third out” debt that would rank ahead of the existing first-lien term loans that can be used for future exchanges of existing first-lien and second-lien term loans is also provided for.

“The agreement with our lenders announced today is further validation of our business and transformation strategy as well as our leadership team,” said company chairman and chief executive officer David Swift in the release. “The transaction set out in this agreement will deliver value to our stakeholders and provide the company with increased financial flexibility as we continue to navigate the current macroeconomic challenges, implement our ongoing growth initiatives, and offer customers the leading products they have come to expect from [the company].”

Serta, an Advent International portfolio company, is an Atlanta-based manufacturer and distributor of mattresses.

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