The Firm recently represented Sealy Corporation and affiliates in connection with the issuance of $350 million aggregate principal amount of 10.875% senior secured first lien notes due 2016, the completion of a new asset-based revolving credit facility, with undrawn commitments thereunder of $100 million, and the execution of a forward purchase contract with Sealy Holding LLC, Sealy Corporation’s majority stockholder and an affiliate of Kohlberg Kravis Roberts & Co. L.P. Pursuant to the forward purchase contract, Sealy Holding LLC provided a forward commitment and posted cash of approximately $177.1 million to purchase its pro rata portion of a rights offering to all shareholders of 8% senior secured third lien convertible notes, as well as any convertible notes that other shareholders do not purchase.
The Company used the net proceeds from the offering of the first lien notes and the cash posted under the forward purchase contract to repay all amounts outstanding under its existing senior secured credit facilities, thereby terminating those facilities, and for general corporate purposes. The transaction enabled Sealy to significantly strengthen its capital structure by enhancing its liquidity position, funding additional cash to the balance sheet and extending nearer term maturities through 2013 and beyond, as well as eliminating quarterly maintenance-based covenants.
Sealy is the largest bedding manufacturer in the world with sales of $1.5 billion in fiscal 2008. The company manufactures and markets a broad range of mattresses and foundations under the Sealy®, Sealy Posturepedic®, including SpringFree™, PurEmbrace™ and TrueForm®; Stearns & Foster®, and Bassett® brands.
The Simpson Thacher team included Joe Kaufman, John Lobrano, Ryan Bekkerus, Iksoo Kim and Jonathan Taylor (Capital Markets); James Cross, Mark de Figueiredo and Cindy Fox (Credit); Joyce Xu and Ying Wang (Equity Derivatives); Nancy Mehlman, Jonathan Cantor and Rian Balfour (Tax); Aimee Adler (Executive Compensation and Employee Benefits); Mardi Merjian, Julia Rubin and Beatie Branch (Real Estate); Marcela Robledo and Keren Siman-Tov (Intellectual Property); and paralegals Emily Farquharson, Courtney Schrenko, Tiffany Vacca and Philip Voss.