Preliminary size and structure of Simmons' loan and bonds emerge

By Sara Rosenberg

New York, Nov. 19 - Preliminary details on Simmons Co.'s proposed credit facility and bond offering have surfaced, with the loan estimated to be sized around $475 million and the bond offering estimated around $340 million, according to a buy-side source.

The facility is expected to consist of a $75 million revolver and a $400 million term loan B with price talk in the Libor plus 275 basis points to 300 basis points area, according to the source. The source added that the term loan B might be increased in size, if the company decides to roll over some additional debt.

Goldman Sachs and UBS Securities are the joint lead arrangers and co-syndication agents on the bank deal, with Goldman listed on the left and acting as sole bookrunner. Deutsche Bank also will be involved in the bank financing and will receive an agent title, according to sources.

Goldman Sachs is also on the left for the bond deal, with UBS and Deutsche acting as joint bookrunners.

The credit facility is not expected to launch until after Thanksgiving, "since people are loaded down with deals right now," the source added.

Proceeds will be used to help support the company's acquisition by Thomas H. Lee Partners, chairman and chief executive officer Charlie Eitel and senior management from Fenway Partners.

In addition to the debt financing, the company is expected to receive $330 million of equity from Thomas H. Lee and $70 million of equity from Fenway and senior management.

The transaction, which is expected to close before year end and is subject to usual conditions, values the company at $1.1 billion, according to a company news release. Fenway, which acquired Simmons in October 1998 from Investcorp for about $513 million, will retain a 10% stake in the company once the transaction closes.

Simmons is an Atlanta manufacturer and distributor of branded bedding products.

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