Syndication of a $685 million facility backing Kohlberg Kravis Roberts & Co.'s $1.5 billion acquisition of mattress manufacturer Sealy Corp. launched last week. J.P. Morgan and Goldman Sachs are leading the financing, which backs the sale to KKR from an investment group that includes Bain Capital, Charlesbank Capital Partners, J.P.Morgan Partners, CIBC Argosy Merchant Fund and BancBoston Capital. The credit comprises a six-year, $125 million revolver priced at LIBOR plus 21/2% and an eight-year, $560 million term loan priced at LIBOR plus 23/4%. Pricing on both are subject to a leverage-based grid.
The transaction value is about nine times adjusted fiscal-year 2003 EBITDA. Sealy ended the fiscal year with debt-to-adjusted EBITDA of around 4.6 times. One buysider said the deal will probably be very similar to the Simmons Co. deal, which he said was a blowout. Goldman and UBS led the $480 million credit facility backing Thomas H. Lee Partners' $1.1 billion acquisition of Simmons from Fenway Partners (LMW, 12/8).
Goldman and J.P. Morgan advised Sealy. The transaction is expected to close in April. A KKR spokeswoman and Goldman bankers and a J.P. Morgan spokesman declined comment. Sealy officials could not be reached by press time.