Boston-based private equity firm Advent International has agreed to buy a majority stake in AOT Bedding Super Holdings, the parent company of National Bedding Co. (the majority owner and licensee of Hoffman Estates, Ill.-based Serta) and Atlanta-based Simmons Bedding Co.
Terms of the deal were not disclosed by the parties involved, but an Aug. 5 Reuters story values the AOT transaction at about $3 billion, including debt. Advent prevailed over other private equity bidders, such as Bain Capital and Berkshire Partners, according to one Reuters source.
Principal investors in AOT, Ares Management LLC and Ontario Teachers’ Pension Plan, bought National Bedding in 2005 for an undisclosed sum. In 2010, the investment group purchased Simmons out of bankruptcy for $760 million. AOT Bedding Super Holdings was formed subsequent to the Simmons purchase.
Ares and Ontario Teachers will retain a significant minority interest in the company, a news release said. The transaction is expected to be completed by the fourth quarter of 2012.
Serta and Simmons will continue to be managed jointly by the board of directors of the holding company and will continue to maintain separate sales, marketing, merchandising and customer-specific product design functions. In some cases, the two companies will work together with dealers, as well as in a variety of other areas, to achieve cost efficiencies and implement best practices, a news release said.
“We are looking forward to our partnership with Advent, as well as our continued relationship with Ares and Teachers,” said Bob Sherman, Serta chief executive officer. “Advent’s experience and resources will help Serta continue our track record of growth and enhance our partnerships with customers and suppliers.”
Gary Fazio, Simmons chief executive officer, said of the deal, “Over the past two years, we have invested significant resources to better understand and then meet the needs and preferences of our customers. We are thrilled to be working with the team at Advent, as well as our existing investors, to continue to gain market share by providing superior products and customer support.”
Advent Managing Director Steven Collins added, “Our strategy going forward is to continue to grow the businesses by ensuring that Serta and Simmons remain focused on delivering high-quality mattresses that help people sleep better.”
Weil Gotshal & Manges LLP acted as legal adviser to Advent International. Barclays acted as lead financial adviser and Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC acted as co-advisers to AOT Bedding Super Holdings. Sullivan & Cromwell LLP acted as legal adviser to AOT Bedding Super Holdings.