Daily News: October 22, 2014

Barclays, Others Arrange Mattress Firm Facility

Mattress Firm Holding completed its acquisition of The Sleep Train, and entered into a facility with Barclays Bank, Merrill Lynch, J.P. Morgan Securities and UBS Securities, as joint bookrunning managers and joint lead arrangers.

The senior secured credit facility is comprised of an asset-based revolver of $125 million that includes a sublimit for letters of credit and swingline loans, subject to certain conditions and limits and (ii) a term loan B borrowing of $720 million. Approximately $49 million of proceeds were drawn under the asset based revolver at closing. The asset based revolving loan will mature on the fifth anniversary of the closing, and the term loan B borrowing will mature on the seventh anniversary of the closing. The Company’s existing credit facility, including its outstanding term loan borrowing, was terminated upon the closing of the transaction.

Barclays acted as exclusive financial advisor to Mattress Firm. Norton Rose Fulbright acted as legal counsel to Mattress Firm in connection with the transaction. Prairie Capital Advisors provided a fairness opinion to the trustee of The Sleep Train. Employee Stock Ownership Plan in connection with the transaction. Shartsis Friese acted as legal counsel to Sleep Train in connection with the transaction.

“We are ecstatic to reach this milestone in our Company’s growth and couldn’t be happier about our future together,” stated Steve Stagner, Mattress Firm’s president and CEO. “With the Sleep Train business, we become the first border to border, coast to coast multi-brand mattress specialty retailer in the United States, with pro forma sales of approximately $2 billion a year. We believe that our combined expertise will allow us to generate significant benefits for our stakeholders in the future. We are highly focused on integrating the two businesses and providing as seamless a transition as possible for all of our employees, customers and other stakeholders.”

Dale Carlsen, CEO of Sleep Train, became president and chief strategy officer of the company and joined the Mattress Firm board of directors as vice chairman. Rob Killgore, COO of Sleep Train, became co-CCO of the company along with current Mattress Firm COO, Ken Murphy. Ron Mittelstaedt, who served as the chairman and CEO of Waste Connections, also joined the board effective with the closing of the acquisition.

The company will maintain a West Coast corporate headquarters near Sacramento, CA.

Carlsen commented, “This transaction is the culmination of nearly 30 years of hard work by the Sleep Train family of employees and the beginning of the next chapter in our phase of growth. I look forward to bringing our two teams together for the benefit of our customers, our employees and the communities we serve.”