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January 5, 2010 –
Simmons Bedding Company
(“Simmons Bedding”), a leading
manufacturer of premium branded
bedding products, today
announced that the U.S.
Bankruptcy Court for the
District of Delaware (the
“Court”) has confirmed its
pre-packaged restructuring plan
(the “Plan”). Today’s decision
allows for the previously
announced acquisition of Simmons
Bedding and all of its domestic
and international subsidiaries,
as well as its parent Bedding
Holdco Incorporated
(collectively, the “Company”),
by affiliates of Ares Management
LLC and Teachers’ Private
Capital, the private investment
department of the Ontario
Teachers’ Pension Plan
(collectively, “AOT”). Simmons
Bedding anticipates that it will
consummate the transaction and
emerge from chapter 11 on or
around January 20, 2010.
Bennett Rosenthal, Senior
Partner at Ares Management LLC,
commented, "Since we first
announced our joint interest in
the Company last September, we
have become even firmer in our
belief Simmons Bedding’s
prestigious brand name, its
innovative products, strong and
experienced management, as well
as positive fundamentals we see
for the industry. As we have
learned from key stakeholders
and by working with management
throughout this process, the
company is well-positioned for
the future.”
Erol Uzumeri, Senior
Vice-President, Teachers'
Private Capital, stated, "What
this process has confirmed for
us is that Simmons Bedding is
the type of company that we
seek: one with proven talent
throughout the organization and
a strong franchise. The
Company’s historical performance
is excellent when measured
against our core investment
criteria, and with its new
capital structure, we are
confident this investment will
produce significant returns for
us and all of its stakeholders –
both now and over time.”
Today’s decision by the Court
marks the last of three major
milestones that the Company has
met since the Plan was announced
on September 25, 2009. First, it
was announced on October 29,
2009 that all waiting periods
under applicable antitrust and
competition regulations in the
U.S. and Canada had expired or
were terminated. Second, the
Company announced on November
16, 2009 that it filed the Plan
with the Court after it received
the overwhelming support of
creditors who cast favorable
votes during the formal consent
solicitation.
Stephen G. Fendrich, Simmons
Bedding’s President and Chief
Operating Officer, commented,
“Just as our lenders and note
holders voted their confidence
last fall, this favorable
decision by the Court further
validates the viability of our
Plan and opens the door to an
exciting future for our Company,
our employees, and all of our
suppliers and our customers.”
Upon the completion of the
transaction and emergence from
chapter 11, the reorganized
companies will have improved
their capital structure by
substantially reducing total
debt obligations from
approximately $1.0 billion to
approximately $450 million. The
Plan as confirmed also provides
for all trade vendors, suppliers
employees, and senior secured
lenders to be paid in full.
Final consummation of the
transaction remains subject to
customary closing terms and
conditions.
Weil, Gotshal & Manges LLP is
acting as legal counsel and
Miller Buckfire & Co., LLC is
acting as financial advisor to
the Company for the chapter 11
cases.
Sullivan & Cromwell LLP is
acting as legal counsel and
Goldman, Sachs & Co. is acting
as financial advisor for the
purchaser.
About Simmons Bedding Company
Atlanta-based Simmons Bedding
Company is one of the world's
largest mattress manufacturers,
manufacturing and marketing a
broad range of products
including Beautyrest®,
Beautyrest Black®, Beautyrest
NxG®, Beautyrest Studio™,
ComforPedic by Simmons™,
ComforPedic Loft™, Natural
Care®, Beautyrest Beginnings™
and BeautySleep®. Simmons
Bedding operates 19 conventional
bedding manufacturing facilities
and one juvenile bedding
manufacturing facility across
the United States, Canada and
Puerto Rico. Simmons Bedding
also serves as a key supplier of
beds to many of the world’s
leading hotel groups and resort
properties. Simmons Bedding is
committed to developing superior
mattresses and promoting a
higher quality sleep for
consumers around the world.
For more information, visit
Simmons Bedding's website at
www.simmons.com.
About Ares Management
Ares Management is an
SEC-registered investment
adviser and alternative asset
manager with total committed
capital under management of
approximately $33 billion as of
September 30, 2009. With
complementary pools of capital
in private equity, private debt
and capital markets, Ares
Management has the ability to
invest across all levels of a
company’s capital structure –
from senior debt to common
equity – in a variety of
industries in a growing number
of international markets. The
Ares Private Equity Group has a
proven track record of
partnering with high quality,
middle-market companies and
creating value with its flexible
capital such as Serta. Other
notable current investments
include General Nutrition
Centers, Inc., Hanger Orthopedic
Group, Inc. (NYSE: HGR) and
Maidenform Brands, Inc. (NYSE:
MFB). The firm is headquartered
in Los Angeles with
approximately 250 employees and
professionals located across the
United States and Europe. For
more information, visit the Ares
website at
www.aresmgmt.com.
About Teachers’ Private
Capital
Teachers’ Private Capital is one
of the world’s largest private
equity investors. It is the
private investment department of
the Ontario Teachers’ Pension
Plan, the largest
single-profession pension plan
in Canada. The Ontario Teachers’
Pension Plan is an independent
corporation responsible for
investing the fund and
administering the pensions of
Ontario’s 284,000 active and
retired teachers. For more
information visit
www.otpp.com.
“Safe Harbor” Statement under
Private Securities Litigation
Reform Act of 1995: This
press release includes
forward-looking statements that
reflect our current views about
future events and financial
performance. Words such as
“estimates,” “expects,”
“anticipates,” “projects,”
“plans,” “intends,” “believes,”
“forecasts” and variations of
such words or similar
expressions that predict or
indicate future events, results
or trends, or that do not relate
to historical matters, identify
forward-looking statements. The
forward-looking statements in
this press release speak only as
of the date of this press
release. These forward-looking
statements are expressed in good
faith and Simmons believes there
is a reasonable basis for them.
However, there can be no
assurance that the events,
results or trends identified in
these forward-looking statements
will occur or be achieved.
Investors should not rely on
forward-looking statements
because they are subject to a
variety of risks, uncertainties,
and other factors that could
cause actual results to differ
materially from Simmons’s
expectations. These factors
include, but are not limited to:
(i) our ability to comply with
and fulfill closing conditions
in the Plan Sponsor Agreement,
including obtaining the
requisite financing; (ii)
compliance with covenants in,
and any defaults under, our
debtor-in-possession financing
agreement; (iii) the potential
adverse impact of any
restructuring and the bankruptcy
filing on our business,
financial condition, liquidity,
and results of operations; (iv)
interest rate and credit market
risks; (v) competitive pressures
in the bedding industry; (vi)
general economic and industry
conditions; (vii) our ability to
launch new products on a timely
basis, the success of our new
products and the future costs to
rollout such products; (viii)
legal and regulatory
requirements; (ix) our
relationships with and viability
of our suppliers, significant
customers and licensees; (x)
fluctuations in our costs of raw
materials and energy prices;
(xi) our ability to hold or
increase prices on our products
and the related effect on our
unit sales; (xii) an increase in
our return rates and warranty
claims; (xiii) our labor
relations; (xiv) encroachments
on our intellectual property;
(xv) our product liability,
intellectual property and other
litigation claims; (xvi) our
level of indebtedness; (xvii)
foreign currency exchange rate
risks; (xviii) our future
acquisitions; (xix) our ability
to achieve the expected benefits
from any personnel realignments;
(xx) higher bad debt expense as
a result of increased customer
bankruptcies due to instability
in the economy and slowing
consumer spending; and (xxi) our
ability to maintain sufficient
liquidity to operate our
business. We undertake no
obligation to update or revise
any forward-looking statements,
either to reflect new
developments or for any other
reason. |
