Consolidation a vintage bedding story
By David Perry -- Furniture Today, March 6, 2005
High Point — The consolidation of licensees at Spring Air continues a trend that has swept through the bedding industry in the past two decades.
In the 1980s, a powerful Sealy licensee, Ohio-Sealy, went on an acquisition binge that saw it gain control over licensor Sealy Inc.
When the dust had settled, Ernie Wuliger's Ohio-Sealy licensee largely had changed Sealy from a licensing organization to a centrally owned and operated company. That structure remains in place today at Sealy, which has but one domestic bedding licensee, a plant in Paterson, N.J.
Simmons, the No. 2 producer, always has had an owned and operated structure.
Serta, the No. 3 producer, has seen significant consolidation recently, with the licensee formerly known as National Bedding Co. acquiring other licensees. In 2003, NBC purchased Sleepmaster, then Serta's largest licensee, and gained control over about 80% of Serta's volume. Last fall, NBC signed a service agreement with the other Serta licensees and assumed overall responsibility for the Serta brand. NBC is now known as Serta International.
Now, a consolidation drive is under way at Spring Air, the industry's No. 4 bedding producer.
H.I.G. Capital, a Miami-based financial company, gained control of Spring Air's largest licensee, Spring Air Partners-North America, last year. That licensee recently acquired Spring Air's second-largest licensee, American Bedding Inds. in Tampa, Fla. Together the two licensees account for about 50% of Spring Air's U.S. sales.
H.I.G. and the former American Bedding say they intend to buy other Spring Air licensees and already have a letter of intent to acquire one.
John Black, managing director of H.I.G. Capital, said some of Spring Air's competitors have achieved "significant operating improvements" through consolidation.
Black said a roll-up of Spring Air licensees would lead to synergies and efficiencies.
Jim Nation, who remains CEO and president of Spring Air's corporate entity in Elk Grove Village, Ill., said the consolidation at Spring Air "brings a singleness of mind" to the company. He added that H.I.G. has "a good track record" and has followed through on the commitments it has made to position Spring Air Partners for growth.
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Consolidation a vintage bedding story
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