Spring Air merger
Largest licensee acquires No. 2
By David Perry -- Furniture Today, March 6, 2005
Miami — H.I.G. Capital, aiming to consolidate all the U.S. Spring Air licensees, has used its portfolio company, Spring Air Partners-North America, to acquire major licensee American Bedding Inds., which serves Florida, Ohio, Indiana and Kentucky.
The deal combines Partners, the largest Spring Air licensee, with the second-largest Spring Air licensee, and creates a new company, Tampa, Fla.-based Consolidated Bedding Inc., which will account for about half of the U.S. sales of Spring Air mattresses.
Steve Antinori, formerly CEO of ABI, will be chairman of Consolidated Bedding. Les Ayers, formerly president of Spring Air Partners, will be president of the new entity.
Spring Air's corporate structure, headed by CEO and President Jim Nation, remains unchanged. Nation said the developments are a plus for Spring Air.
"I think this is a positive step forward for the Spring Air organization," he said. "It will allow this significant part of our group to have the financial wherewithal to thrive. They are assembling an excellent management team with a lot of industry experience."
The Consolidated Bedding team includes Steve Russo, formerly CEO of Latex International, who will be chief operating officer, and Mike Rakauskas, formerly of Sealy, Spring Air and Simmons, who will be chief financial officer.
Consolidated hopes to acquire some of the other licensees of Chicago-based Spring Air, said John Black, managing director of H.I.G. Capital. It already has a letter of intent to acquire another significant Spring Air licensee, Nation said.
Black said a consolidation of Spring Air licensees would produce purchasing synergies, administrative efficiencies and the adopting of "best practices" in manufacturing systems.
H.I.G. Capital, a financial company with over $1.5 billion in equity capital under management, acquired Spring Air Partners last fall as the latter emerged from Chapter 11 protection. Partners accounts for almost 40% of Spring Air's volume.
Black said that, prior to emerging from Chapter 11, Partners had gone through a period of inadequate capital and unprofitable operations due to a "dysfunctional" ownership group that could not work together effectively.
The Chapter 11 restructuring cut Spring Air Partners' debt to $45 million from $75 million, Black said.
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