SEALY TO BE ACQUIRED BY KKR FOR $1.5 BILLION
HIGH POINT, N.C., March 4, 2004
-- Sealy Corporation, the world's largest manufacturer
of bedding products, announced today that it
had signed a definitive merger agreement with
affiliates of Kohlberg Kravis Roberts &
Co. (KKR) in a transaction valued at approximately
$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 percent of Sealy
in the transaction, with existing Sealy shareholders
retaining the remaining 8 percent interest.
"We are pleased to announce our new partnership
with KKR," said David J. 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. During
the past year we reached a number of important
milestones -- achieved record sales, reduced
debt significantly by carefully managing working
capital, and launched our UniCased and TripLCased
product technology. As a result, we are well
positioned to begin the next chapter of Sealy's
growth. 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," said
McIlquham.
As part of the transaction, members of Sealy
management will partner with KKR by retaining
a significant equity stake in the company. No
changes are currently contemplated in Sealy's
management, strategy, or operations.
"Sealy Corporation has long been known
for setting the standard of excellence in bedding
products," said Scott M. Stuart, a Member
of KKR. "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 has been approved by Sealy shareholders,
is expected to close in April 2004, and will
be financed through a combination of debt and
equity. The merger is subject to customary conditions,
including the funding of the transaction pursuant
to existing financing commitments. Substantially
all of Sealy's existing indebtedness will be
refinanced in connection with the transaction.
Goldman, Sachs & Co. and J.P. Morgan Securities
Inc. served as financial advisors to Sealy Corporation.
Kirkland & Ellis LLP advised the selling
Sealy shareholders and Simpson Thacher &
Bartlett LLP advised KKR.
KKR is one of the world's oldest and most experienced
private equity firms specializing in management
buyouts, with offices in New York, Menlo Park,
California, and London, England. KKR has a long
history as an investor in world-class consumer
products companies, including Duracell International,
Inc., The Gillette Company and Elmer's Products
Inc. For more information, please visit www.kkr.com.
Sealy is the largest bedding manufacturer in
the world with sales of $1.2 billion in 2003.
The Company manufactures and markets a broad
range of mattresses under the Sealy (R), Sealy
Posturepedic (R), Stearns & Foster (R),
and Bassett (R) brands. Sealy has the largest
market share and highest consumer awareness
of any bedding brand in North America. Sealy
employs more than 6,000 individuals, has 31
plants, and sells its products to 3,200 customers
with more than 7,400 retail outlets worldwide.
Sealy is also a leading supplier to the hospitality
industry. For more information, please visit
www.sealy.com.
Bain Capital is a leading global private investment
firm with more than $17 billion in assets under
management. Headquartered in Boston, Bain Capital
has offices in New York, London and Munich.
For more information, please visit www.baincapital.com.
This document contains forward-looking
statements within the meaning of the safe harbor
provisions of the Securities Litigation Reform
Act of 1995. Terms such as "expect,"
"believe," "continue," and
"grow," as well as similar comments,
are forward-looking in nature. Although the
Company believes its growth plans are based
upon reasonable assumptions, it can give no
assurances that such expectations can be attained.
Factors that could cause actual results to differ
materially from the Company's expectations include:
general business and economic conditions, competitive
factors, raw materials purchasing, and fluctuations
in demand. Please refer to the Company's Securities
and Exchange Commission filings for further
information.
Contacts:
Jim Hirshorn,
CFO, or
Mark Boehmer,
Treasurer of Sealy Corporation,
+1-336-861-3500; or
Ruth Pachman or David Lilly
of Kekst and Company,
+1-212-521-4800, for KKR
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