Licensee rollup called joint effort
David Perry -- Furniture Today, July 4, 2005
Tampa, Fla. — Consolidated Bedding, Spring Air's largest licensee, is working closely with Spring Air's corporate office as it seeks to strengthen the industry's fourth-largest brand.
Consolidated President and Chief Operating Officer Steve Russo pledged to continue that collaboration. "We have made considerable progress in alignment and working together in the last few months," he said.
Jim Nation, president of Spring Air, said, "Our relationship with Steve Antinori (Consolidated's chairman and CEO) and Steve Russo is very good. We have worked well together."
Consolidated Bedding was formed in February in a merger assisted by H.I.G. Capital, a Miami-based investment company. John Black, managing director of H.I.G., said then that a rollup of Spring Air licensees would produce purchasing synergies, administrative efficiencies and the adoption of best practices.
Rivals such as Sealy and Serta have gone through similar consolidations and have achieved "significant operating improvements," Black said.
Russo said a consolidation "will enhance our performance with the retailers and, ultimately, with consumers. We will be more focused."
He estimated the licensee rollup could take up to 18 months. "I don't think it will ever be 100%," Russo said. "A couple of licensees may be interested in maintaining their independent operations."
Consolidated is close to acquiring the next-largest Spring Air licensee, and dialog with other Spring Air licensees "is continuous," he said.
Nation said that when Consolidated buys the next-largest licensee, it would account for between 65% and 70% of Spring Air's volume, but would not gain effective control of the group's stock and voting shares. Consolidated would like to acquire enough additional stock in Spring Air to gain control of the licensor, he said.
With the impending acquisition, Nation said Consolidated will have eight Spring Air factories in the United States, leaving 10 on their own.
"It has been a collaborative effort on my part with the Antinori group, with the other licensees and with H.I.G. to consolidate the group," Nation said.
