Goldman Sachs is leading a $570 million facility to back Ares Management and Teachers' Private Capital's acquisition of National Bedding Co., which makes Serta mattresses. The credit comprises a five-year, $50 million revolver; a six-year, $320 million first-lien term loan; and a seven-year, $200 million second lien, an Ares official said. Pricing was not available by press time. A bank meeting was held in New York last Thursday. Teachers' Private Capital is the private equity arm of the Ontario Teachers' Pension Plan. Merrill Lynch and GE Capital are also involved in the deal.
Ares has owned a minority stake in National Bedding Co. since 2003 and has been looking to increase that stake since then. Goldman Sachs, which was representing the company, was going out to auction with it, but because of its ownership role, Ares was able to jump ahead of the process, a spokesman for the private equity firm said. An official close to the companies said the two equity groups are excited about the growth prospects the bedding company offers. Existing equity owners of National Bedding will be reinvesting a portion of their proceeds and the senior management team will remain in place. The deal is expected to close at the end of August.
Ares and Ontario have worked together in the past, including a recapitalization in 2003 of Samsonite Corp., one of the world's largest manufacturers and distributors of luggage. Bain Capital (Europe) was also involved in that deal.
Goldman Sachs and William Blair & Co. represented National Bedding in this transaction. It had an EBITDA of $90 million for the latest 12 months ending in June and according to Moody's Investors Service, as of Dec. 31, adjusted leverage was 4x. Founded in 1931, Serta is the third largest U.S. manufacturer of mattresses and foundations in the U.S. and Canada.