Tempur Sealy Announces Close of $1.6 Billion Term Loan B Facility

Rhea-AI Summary

Tempur Sealy (NYSE: TPX) has successfully closed a $1.6 billion senior secured Term Loan B facility, set to mature in seven years. The company also amended its 2023 Credit Agreement to extend the availability period of $605 million in Delayed Draw Term A commitments. The Term Loan B proceeds, along with available cash and other debt proceeds, will be used exclusively to fund the previously announced Mattress Firm acquisition. The funds have been placed in escrow and will be released when the acquisition closes.

Positive

• Secured $1.6 billion in Term Loan B financing for Mattress Firm acquisition
• Successfully extended availability period for $605 million in Term A commitments
• Strong debt market support indicating confidence in the acquisition strategy

Negative

• Significant increase in debt burden with new $1.6 billion Term Loan B
• Additional leverage could impact company's financial flexibility

–  Expects to use Term Loan B proceeds to fund the expected acquisition of Mattress Firm

–  Aligns availability period of Delayed Draw Term A Loan commitments

LEXINGTON, Ky., Oct. 25, 2024 /PRNewswire/ -- Tempur Sealy International, Inc. (NYSE: TPX, "Company" or "Tempur Sealy") today announced that it has successfully closed on a senior secured Term Loan B facility in an aggregate principal amount of $1.6 billion (the "Term Loan B"). The Term Loan B will mature seven years after the date of closing. The Company also amended its 2023 Credit Agreement to reflect this new Term Loan B and extend the availability period of $605 million of the Company's Delayed Draw Term A commitments that closed earlier this year.

Tempur Sealy intends to use the proceeds from the Term Loan B, together with cash available and proceeds from other debt, solely to fund the cash consideration for the previously announced acquisition of Mattress Firm Group Inc. ("Mattress Firm"). The proceeds from the Term Loan B were funded into escrow and are to be released concurrently with the closing of the Mattress Firm acquisition.

Tempur Sealy Chairman and CEO Scott Thompson commented, "We appreciate the strong support behind this financing from the debt market. With this step, we have obtained the financing necessary to fund the proposed acquisition of Mattress Firm."

Forward-Looking Statements

This press release contains statements that may be characterized as "forward-looking" within the meaning of the federal securities laws. Such statements might include information concerning one or more of the Company's plans, guidance, objectives, goals, strategies, and other information that is not historical information. When used in this release, the words "will," "targets," "expects," "anticipates," "plans," "proposed," "intends," and variations of such words or similar expressions are intended to identify forward-looking statements. These forward-looking statements include, without limitation, statements relating to the Company's expectations regarding the expected Mattress Firm acquisition, including the outcome of the pending litigation with the FTC, expectations regarding post-closing supply agreements, future performance, integration of acquired companies with our business and the ability of the Company to close the Mattress Firm acquisition on the timeline indicated or at all. Any forward-looking statements contained herein are based upon current expectations and beliefs and various assumptions. There can be no assurance that the Company will realize these expectations or that these beliefs will prove correct.

Numerous factors, many of which are beyond the Company's control, could cause actual results to differ materially from any that may be expressed herein as forward-looking statements. These potential risks include risks associated with satisfaction of closing conditions prior to consummation of the acquisition, Mattress Firm's ongoing operations; the ability to successfully integrate Mattress Firm into Tempur Sealy's operations and realize synergies from the transaction; the possibility that the expected benefits of the acquisition are not realized when expected or at all; general economic, financial and industry conditions, particularly conditions relating to the financial performance and related credit issues present in the retail sector, as well as consumer confidence and the availability of consumer financing; the impact of the macroeconomic environment in both the U.S. and internationally on Mattress Firm and the Company; uncertainties arising from national and global events; industry competition; the effects of consolidation of retailers on revenues and costs; and consumer acceptance and changes in demand for Mattress Firm's and the Company's products and the factors discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2024. There may be other factors that may cause the Company's actual results to differ materially from the forward-looking statements. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.

About Tempur Sealy International, Inc.

Tempur Sealy is committed to improving the sleep of more people, every night, all around the world. As a leading designer, manufacturer, distributor and retailer of bedding products worldwide, we know how crucial a good night of sleep is to overall health and wellness. Utilizing over a century of knowledge and industry-leading innovation, we deliver award-winning products that provide breakthrough sleep solutions to consumers in over 100 countries.

Our highly recognized brands include Tempur-Pedic®, Sealy® and Stearns & Foster® and our popular non-branded offerings consist of value-focused private label and OEM products. At Tempur Sealy we understand the importance of meeting our customers wherever and however they want to shop and have developed a powerful omni-channel retail strategy. Our products allow for complementary merchandising strategies and are sold through third-party retailers, our over 750 Company-owned stores worldwide and our e-commerce channels.  With the range of our offerings and variety of purchasing options, we are dedicated to continuing to turn our mission to improve the sleep of more people, every night, all around the world into a reality. 

Importantly, we are committed to carrying out our global responsibility to protect the environment and the communities in which we operate. As part of that commitment, we have established the goal of achieving carbon neutrality for our global wholly owned operations by 2040.

Tempur Sealy Investor Relations Contact

Aubrey Moore

Investor Relations

Tempur Sealy International, Inc.

800-805-3635

Investor.relations@tempursealy.com

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SOURCE Tempur Sealy International, Inc.

FAQ

What is the size of Tempur Sealy's (TPX) new Term Loan B facility?

Tempur Sealy's new Term Loan B facility is $1.6 billion.

What is the maturity period for Tempur Sealy's (TPX) Term Loan B?

The Term Loan B will mature seven years after the date of closing.

How will Tempur Sealy (TPX) use the Term Loan B proceeds?

The proceeds will be used to fund the cash consideration for the acquisition of Mattress Firm, along with other available cash and debt proceeds.

What is the amount of Delayed Draw Term A commitments mentioned in TPX's announcement?

The Delayed Draw Term A commitments amount to $605 million.