KKR in $1.5bn mattress buyout

In the third private equity mattress deal in as many months, the New York buyout firm has agreed to acquire Sealy, the world’s largest maker of bedding products, from a group of private equity firms.

Kohlberg Kravis Roberts has agreed to buy Sealy, the world’s largest manufacturer of mattresses, from a group including Bain Capital, Charlesbank Capital Partners, JP Morgan Partners, CIBC Argosy Merchant Fund and BancBoston Capital, for $1.5 billion (€1.23 billion).

 

Sealy, based in High Point, North Carolina, was acquired by the Bain-led investor group in 1997 for an undisclosed amount, although press reports put the transaction value at roughly $800 million. The group acquired the bedding company from Zell/Chilmark Fund.

 

When the Bain group bought Sealy, the company had reported revenues of $579 million. Today’s announcement stated that Sealy has sales of $1.2 billion.

 

KKR and Sealy management will acquire 92 percent of the company while the Bain group will retain the remaining interest.

 

The deal is expected to close next month.

 

Sealy is known for its Sealy Posturepedic, Stearns & Foster and Basset brands. It employs 6,000 people and has 31 plants, according to the press release.

 

In November, Boston-based Thomas H. Lee Partners bought Simmons, another mattress company, from private equity firm Fenway Partners for $1.1 billion. The transaction marked the fifth time Simmons had been owned by a private equity firm.

 

The same month, global investment firm Investcorp acquired Swedish mattress maker Hilding Anders, for an undisclosed amount. Hilding Anders has annual revenue of $457 million.

 

When the Bain group purchased Sealy in 1997, the company was based in Cleveland, Ohio. The following year, the company’s headquarters were moved to North Carolina. Last year, Sealy acquired shares of a bankrupt distributor of its products.