Serta/Simmons upsizes term loan to $1.31 billion, slashes spread talk

By Paul A. Harris

Portland, Ore., Sept. 18 - AOT Bedding Super Holdings LLC upsized its seven-year senior secured term loan to $1.31 billion from $1.233 billion on Tuesday, according to an informed source.

Libor spread talk was slashed to 375 basis points from previous talk of 425 to 450 bps.

The deal comes with a 1.25% Libor floor and an original issue discount of 99.

Pricing is expected on Wednesday.

The facility also includes a $225 million ABL revolver.

Morgan Stanley Senior Funding Inc., Goldman Sachs & Co., UBS Securities LLC, Deutsche Bank Securities Inc. and Barclays are the bookrunners on the deal and joint lead arrangers with Jefferies & Co. and RBC Capital Markets LLC.

Proceeds will be used to help fund the acquisition of the company by Advent International and to refinance existing debt.

Other funds for the transaction will come from $725 million of high-yield bonds, for which Goldman Sachs is the left lead.

Under the agreement, mattress manufacturer AOT, the parent company of Hoffman Estates, Ill.-based National Bedding Co. and Atlanta-based Simmons Bedding Co., is being purchased from Ares Management LLC and the Ontario Teachers' Pension Plan.

Ares and Ontario Teachers' will retain a significant equity stake in the company.

Closing is expected in the fourth quarter, subject to conditions.

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