- BedTimes Supplies Guide
Mattress major Sealy has signed a merger agreement with affiliates of Kohlberg Kravis Roberts & Co. in a transaction valued at about $1.5 billion.
Sealy Corp. is being acquired from a private investment group that includes Bain Capital, Charlesbank Capital Partners, JPMorgan Partners, CIBC Argosy Merchant Fund and BancBoston Capital. KKR and Sealy management will acquire approximately 92% of Sealy in the transaction. Existing Sealy shareholders will retain the remaining 8% interest.
As part of the transaction, members of Sealy’s management team will partner with KKR by retaining a significant equity stake in the company. In announcing the deal on March 4, the principals said no changes were planned for Sealy’s management, strategy or operations at that time.
“We are pleased to announce our new partnership with KKR,” said Dave McIlquham, Sealy’s president and chief executive officer. “KKR has a long history of investing in world–class consumer product companies to foster growth and expansion over the long term. KKR was particularly attracted to Sealy’s strong market position and our leading brand names in the Sealy Posturepedic and Stearns & Foster product lines.”
McIlquham pointed to several of Sealy’s accomplishments in the past year, including record sales, debt reduction and the launch of UniCased and TripLCased product technology.
“As a result, we are well positioned to begin the next chapter of Sealy’s growth,” he says. “In particular, we look forward to working with KKR to expand and accelerate our product development programs to bring new innovation and consumer–preferred products to our customers. We also expect to move forward with the international expansion of our well–known brands.”
Scott Stuart, a member of KKR, said Sealy’s recent performance and potential for growth made the company attractive to KKR.
“Sealy Corp. has long been known for setting the standard of excellence in bedding products,” he said. “Equally important, Sealy today is a global company, leading the industry in brand recognition, market share, technological advancement and product innovation. Its recent record sales performance reflects its brand strength, as well as new product introductions that are being received extremely well in some of the fastest growing segments of the market. We are excited about the significant potential for the company’s future growth and look forward to working with Dave McIlquham and his management team to lend our full support to the continued development and expansion of a great consumer brand and a fine company.”
The merger, approved by Sealy shareholders, is expected to close in April. It will be financed through a combination of debt and equity. Sealy manufactures and markets mattresses under the Sealy, Sealy Posturepedic, Stearns & Foster and Bassett brands. It employs more than 6,000 people with 31 plants and offices.