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Advent International To Acquire Majority Interest In Serta & Simmons Bedding

Furniture Industry News Update - Furniture World Magazine
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Article Summary: Ares Management LLC and Ontario Teachers’ Pension Plan to retain significant minority equity stake.


Advent International, the global private equity firm, announced that it has agreed to acquire a majority interest in AOT Bedding Super Holdings, the parent company of National Bedding Company (the majority owner and licensee of Serta) and Simmons Bedding Company. Serta and Simmons are two of the largest and fastest growing mattress manufacturers in the world, offering a wide variety of innovative and popular mattresses across various price points.

Current investors Ares Management LLC and the Ontario Teachers’ Pension Plan (Teachers’) will retain a significant equity stake. The transaction is expected to be completed by the fourth quarter of 2012, subject to various closing conditions.

“We are looking forward to our partnership with Advent, as well as our continued relationship with Ares and Teachers’,” said Bob Sherman, CEO of Serta. “Advent’s experience and resources will help Serta continue our track record of growth and enhance our partnerships with customers and suppliers.”

“Over the past two years, we have invested significant resources to better understand and then meet the needs and preferences of our customers,” said Gary Fazio, CEO of Simmons Bedding. “We are thrilled to be working with the team at Advent, as well as our existing investors, to continue to gain market share by providing superior products and customer support.”

“We are excited to be investing in Serta and Simmons, two companies with strong momentum in an industry we believe is poised for growth,” said Jefferson Case, Principal at Advent International. “We look forward to working with our investment partners and the management teams of both companies.”

“Our strategy going forward is to continue to grow the businesses by ensuring that Serta and Simmons remain focused on delivering high quality mattresses that help people sleep better,” said Advent Managing Director Steven Collins.

“We are proud to have assembled the leading company in the bedding industry over the last seven years,” said Bennett Rosenthal, Senior Partner at Ares Management. “We have enjoyed our partnership with Bob and Gary, as well as the rest of the leadership team, who have led the growth of Serta and Simmons to the top position in the industry. We are equally enthusiastic about our partnership with Advent and our participation in the company’s continued growth.”

“This investment will represent a significant step in the implementation of Serta’s and Simmons’ strategies to deliver the best possible products in the marketplace,’ said Jane Rowe, Senior Vice-President, Teachers’ Private Capital. “With the Advent team’s experience and resources, and the hard work of the management team and committed employees, we see excellent opportunities to continue growing the business and look forward to remaining a part of this ongoing success story.”

Serta and Simmons will continue to be managed jointly by the board of directors of their holding company and will continue, as in previous years, to maintain separate sales, marketing, merchandising and customer-specific product design functions. Also, the two companies will typically go to the marketplace separately, although, in some cases, the two companies will work together with dealers as well as in a variety of other areas to achieve cost efficiencies and implement best practices.

Advent is one of the world’s most active investors in the retail and consumer sector, having invested in ten companies over the last five years and with 20 dedicated investment professionals globally. Relevant current and historical investments include Five Below, Party City, Lululemon Athletica, Hudson News and Bojangles’.

Weil Gotshal & Manges LLP acted as legal advisor to Advent International. Barclays acted as lead financial advisor and Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC acted as co-advisors to AOT Bedding Super Holdings. Sullivan & Cromwell LLP acted as legal advisor to AOT Bedding Super Holdings.

About Advent International: Founded in 1984, Advent is one of the world’s leading global buyout firms, with offices in 16 countries on four continents. A driving force in international private equity for 27 years, Advent has built an unparalleled global platform of over 170 investment professionals across Western and Central Europe, North America, Latin America and Asia. The firm focuses on international buyouts, strategic repositioning opportunities and growth buyouts in five core sectors, working actively with management teams to drive revenue growth and earnings improvements in portfolio companies. Since its inception, Advent has raised $26 billion in private equity capital and, through its buyout programs, has completed over 270 transactions in 35 countries. For more information, please visit www.adventinternational.com.

About National Bedding Company, LLC: National Bedding Company, LLC (NBC) is the largest licensee and majority shareholder of Serta, Inc. with 18 manufacturing plants in the United States and 2 in Canada. NBC manufactures and markets a broad range of products under the Serta® brand, including Perfect Sleeper®, iComfort®, iSeries™, Perfect Day®, Sertapedic® and a portfolio of licensed products. For more information, visit www.serta.com.

About Simmons Bedding Company: 
Atlanta-based Simmons Bedding Company is one of the world's largest mattress producers and the maker of Beautyrest®. Simmons manufactures and markets a broad range of products including Beautyrest®, Beautyrest TruEnergy™, Beautyrest Black®, ComforPedic® from Beautyrest®, Natural Care® and BeautySleep®. Simmons Bedding operates 19 conventional bedding manufacturing facilities across the United States, Canada and Puerto Rico. Simmons Bedding also serves as a key supplier of beds to many of the world's leading hotel groups and resort properties. Simmons Bedding is committed to developing superior mattresses and promoting a higher-quality sleep, helping ensure consumers around the world are Living Life Fully Charged™. For more information, visit www.simmons.com, or follow Simmons Bedding on Facebook, Twitter and YouTube.

About Ares Management LLC

Ares Management LLC is a global alternative asset manager and SEC-registered investment adviser with approximately $54 billion of committed capital under management and approximately 520 employees as of June 30, 2012. The firm is headquartered in Los Angeles with professionals also located across the United States, Europe and Asia and has the ability to invest in all levels of a company's capital structure -- from senior debt to common equity. Ares' investment activities are managed by dedicated teams in three investment groups: Capital Markets (leveraged loans, high yield, stressed/distressed, and structured products), Private Debt (corporate and commercial real estate) and Private Equity. Ares Management was built upon the fundamental principle that each platform benefits from being part of the greater whole. This multi-asset class synergy provides its professionals with insights into industry trends, access to significant deal flow and the ability to assess relative value.

The Ares Private Equity Group pursues majority or shared-control investments, principally in middle market companies with strong business franchises and in situations where its capital can serve as a catalyst for growth. Ares Management's private equity senior partners average more than 20 years of experience investing in, controlling, advising, and restructuring companies.

About Ontario Teachers’ Pension Plan: With $12 billion of invested capital, Teachers’ Private Capital (TPC) is one of the world’s largest and most sophisticated pools of investment capital. TPC has a multi-faceted investment platform where TPC leads deals, participates in co-investments, and invests in funds in regions and sectors it cannot access directly. TPC has a global footprint, with offices in Toronto, London, and New York and private equity exposure to North America, Europe, Africa and Asia-Pacific. TPC is the private investment arm of the Ontario Teachers' Pension Plan, which with $117.1 billion in assets as of December 31, 2011, is the largest single-profession pension plan in Canada. An independent organization, it invests the pension fund's assets and administers the pensions of 300,000 active and retired teachers in Ontario. For more information visit www.otpp.com.

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