Simmons Emerges from Bankruptcy with New PE Owners
Prepackaged reorganization allowed mattress maker to cut debt load by $550 million
January 25, 2010
Simmons Bedding Co., the Atlanta mattress manufacturer, has emerged from bankruptcy, having been acquired by private-equity firms Ares Management LLC and Teachers' Private Capital.
The company's prepackaged Chapter 11 plan allowed it to reduce its debt to $450 million from $1 billion. A company that had been owned by Boston private-equity firm Thomas H. Lee Partners (THL) prior to its court-supervised reorganization, Simmons filed for bankruptcy protection in November 2009 after a downdraft in consumer spending eroded demand for its mattresses.
Simmons sells mattresses under the brand names Beautyrest, ComforPedic by Simmons, Natural Care and BeautySleep through 3,300 retailers.
Its five largest unsecured creditors included State Street Bank & Trust, Goldman Sachs, Bank of New York Mellon, U.S. Bank and JPMorgan, according to bankruptcy court filings.
Deutsche Bank, which was advised by law firm Simpson Thacher & Bartlett, provided $35 million of debtor-in-possession financing to the Atlanta company during its reorganization in Delaware's bankruptcy court.
THL, it should be noted, was not the only buyout group to have owned Simmons, a company founded in 1870. A number of established private-equity firms have bought and sold the manufacturer over the last two decades including Investcorp (Investcorp owns SourceMedia Inc., the parent company of IDD).
Miller Buckfire & Co. served as Simmons' restructuring advisor, while Weil, Gotshal & Manges was debtor counsel.
Sullivan & Cromwell provided counsel to Ares and Teachers' Private Capital, which received financial advice from Goldman Sachs.
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