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Simmons sells for $1.1B

Eitel, other execs have stake in Thomas H. Lee-led deal

By David Perry -- Furniture Today, November 23, 2003

Boston — A private equity firm and senior management of Simmons have agreed to acquire the fast-growing bedding producer in a transaction that values the company at $1.1 billion.

The Boston-based firm Thomas H. Lee Partners, together with Simmons Chairman Charlie Eitel and other management, signed a definitive agreement to acquire Simmons from Fenway Partners, a New York-based investment firm. The deal is expected to close before the end of the year.

Fenway, which acquired Simmons in October 1998 from Investcorp for approximately $513 million, will retain a 10% stake in Simmons.

The company's senior management team will remain in place and will have an ownership stake described as significant, although details were not released.

Scott Schoen, a managing director of Thomas H. Lee Partners, said Simmons management has "successfully developed a brand-driven and customer—focused enterprise widely recognized for its product innovation and relentless pursuit of operational efficiency."

Todd Abbrecht, another THL managing director, called Simmons "a great company in an industry that has grown at a 6% annual rate over the last 20 years. Simmons' leading market position and focus on the premium bedding segment will enable the company to continue its track record of successful growth."

Fenway officials said Simmons has been an excellent investment. "Charlie Eitel and has team have done a wonderful job in delivering outstanding results over the last four years and repositioning Simmons as a market leader in the bedding industry," said Peter Lamm, chairman and chief executive officer of Fenway. "We are very confident they will continue to deliver superior performance in the coming years and it is for this reason we will maintain an investment in the company."

The transaction will mark Thomas H. Lee's return to the home furnishings industry. The equity firm, which focuses on identifying and acquiring substantial ownership positions in growth companies, formerly had stakes in Stanley Furniture, Image Carpets and Guilford Inds. The firm currently manages approximately $12 billion of committed capital, including its most recent fund, the $6.1 billion Thomas H. Lee Equity Fund V.

Notable transactions sponsored by the firm include American Media, Houghton Mifflin, Rayovac, GNC and Snapple Beverage, among many others.

Thomas H. Lee will become the ninth owner of Simmons since 1978, when the company went private after years as a public company.

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